PII

Question 1

What is the purpose of PII

Answer 1

To provide financial cover in the event a client suffers a financial loss as a breach of professional duty

Question 2

What are the PII requirements set by RICS

Answer 2

1. Policy must be made on an ‘each and every’ claim basis
2. They set out minimum level of cover required and max level of uninsured excess
3. Run off cover must be in place for at least 6 years
4. Cover should be in place for all employees, past and present

Question 3

What is the minimum level of indemnity cover required by the RICS

Answer 3

It is based on the previous year’s turnover
£100k or less - £250,000
£100k to £200k - £500,000
£200k plus - £1,000,000

Question 4

What is the minimum level of uninsured excess required by the RICS

Answer 4

It is based on the previous year’s turnover
£10m or less - The greater of 2.5% of the sum insured or £10k
£10m or more - No limit

Question 5

What is run off cover

Answer 5

Insurance for claims made against individuals or firms after they have ceased trading

Question 6

What is RLBs minimum required level of cover required and max level of uninsured excess

Answer 6

1. £1m level of cover
2. 2.5% of insured sum (£25,000)

Question 7

Who is RLB’s insurance provider

Answer 7

Hettle Andrews are the insurance and risk management advisor
Allianz PLC are the insurers

Question 8

What is an Assigned Risk Pool (ARP)?

Answer 8

Facility for actively trading Regulated Firms who find themselves unable to obtain insurance
Temporary professional indemnity insurance for members
Firms can remain in the ARP for a maximum of three years

Question 9

What measures can be taken to avoid PI Claims

Answer 9

1. Keep detailed records
2. Avoid poor management and excessive workloads
3. Use proper letters of engagement, scope of services

Question 10

What should your insurance company expect if you make a mistake

Answer 10

For you to notify them and comply with procedures set out in the insurance policy