PII Flashcards
What is Professional Indemnity Insurance?
PII protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered.
What is negligence?
Failure to provide the duty of care that is owed.
What is the purpose of PII for firms and individuals?
- Protect firms from financial loss if they cannot meet the claim from their own resources
- Protects the insured member or firm against the consequences of its liability to pay damaged to a third party for breaches of professional duty
- Ensures that firms clients can recover their financial losses.
What are the minimum levels of indemnity?
Firms turnover in the preceding year
Minimum limit of indemnity (this is for each and every claim)
£100,000 or less - £250,000
£100,001 to £200,000 - £500,000
£200,001 and above - £1,000,000
What is run off cover?
Run-off insurance is a form of professional indemnity insurance (PII) providing cover for the past liabilities of a business once it has ceased trading
How long does the RICS require firms and individuals to have run off cover in place?
6 years
What is PII and why is it important to have it as a professional offering services?
Type of insurance that provides protection against claims of professional negligence, errors or omissions. It is important to have PI insurance as it provides a safety net in case a client or third party makes a claim against you for damages resulting from a mistake or error in your work. PII also provides peace of mind and confidence to clients, who are more likely to trust your services.
When does your insurer first need to know if a complaint was made against your firm?
This depends on your policy and specific agreement with the insurers. However, usually as soon as the complaints handling procedure is triggered.
What steps should a member take if they are unable to obtain the required level of insurance cover?
They should contact the RICS as soon as reasonably practicable to discuss their situations. RICS may be able to provide guidance of support to help the member find appropriate insurance cover.
What measures should be taken to try and avoid PI Claims?
Keep full and detailed records
Don’t advise outside you area of competence
Use RICS guidance
How many years after an instruction has been completed can a Professional Indemnity Insurance claim be made?
15 years
