Professional Indemnity Insurance

Question 1

What is PII?

Answer 1

Professional Indemnity Insurance

Question 2

What are the minimum PII requirements?

Answer 2

Based on Firm Turnover:

£0-100k - £250k min

£100-200k - £500k min

£200k - £1m min

Question 2

Who does PII protect?

Answer 2

Clients, Surveyors and Third Parties against negligence claims

Question 3

How would you determine PII cover if you were a new business?

Answer 3

Estimate the turnover and adjust in due course accordingly

Question 4

What is required for a firm who has ceased trading?

Answer 4

Adequate and appropriate run-off cover:

Consumer claims: £1m over min 6 years

Commercial Claims - No set limit for six years

Question 4

What are the maximum levels of uninsured excess?

Answer 4

Based on turnover in proceeding year:

Up to £10m - Greater of 2.5% sum insured or £10,000

Over £10m - No set limit

Question 5

What is required for unpaid work (pro-bono)?

Answer 5

Appropriate PII cover

Question 6

What is a run-off pool?

Answer 6

When your business ceases, you will still require PII insurance. This is because PII is provided on a claims made basis and insurance is require for claims made after your business has ceased arising from services undertaken prior to ceasing.

The ROP is collectively underwritten by all RICS Listed Insurers and managed on behalf of insurers and the RICS by Miller Insurance Services LLP.

Question 7

What is available to firms who cannot arrange cover?

Answer 7

RICS Run-off pool

(Assigned Risk Pool)

Question 8

What are your firms liability caps?

Answer 8

Confidential

General Rule:

50x Fee or £1m

Question 9

What relevant guidance notes are there on PII?

Answer 9

Guidance note: Risk, Liability and Insurance 2021

Advice:
- Have liability caps
- Clarify only client reliance in ToE, not third parties

Question 10

What is negligence?

Answer 10

When a duty of care that exists has been breached and there is loss and a claim for damages arises.

Question 11

What are the limitation periods of negligence?

Answer 11

Outlined in Limitations Act 1980

• 6 years from the date of negligent act
• 3 years from the date of knowledge of the damage, subject to 15 years long stop from the negligent act.

Question 12

How can negligence be avoided?

Answer 12

• Confirming precise instructions in writing
• Ensure competence
• Detailed file notes
• Cap liability

Question 13

What needs to have occurred to be able to claim negligence?

Answer 13

Duty of care is breached - there is a loss - claim for damages arises.

Question 14

Did PII cover change with the on-going impact of Covid-19?

Answer 14

No - maintained judgement on a case by case basis