Professional Indemnity Insurance Flashcards
What is PI insurance
Professional Indemnity Insurance
Commerical policy designed to protect business owners, freelancers and self employed if clients claim a service is inadequate
What is Run off cover
Covers historic liabilities of a business and its directors when the business ceases or is auired
If you were to cease trading, what level of run off cover would you put in place
6 Years underhand
12 Years deed
PII in aggregate vs on each every claim basis
Aggregate (more cost effective but could leave you exposed)
Total limit of indemnity is max insurer will pay out over term
Each every claim (more cover but comes with higher premium)
Full limit of indemnity available for each individual claim during term
Minimum limit of indemnity
Firms turnover preceeding year = Minimum limit indemnity
£100k less = min £250k
£101 to £200k= min £500k
£201 above = min £1mil
Maximum level of uninsured excess
Limit of indemnity = Maximum uninsured excess
Up to and inc £500k = Greater of 2.5% of sum insured or £10k
Over £500k = 2.5% of sum instead
PII Requirements
- Each every claim basis or aggregate with round clock reinstatements
- Min levels indemnity
- Max level uninsured excess
- Fully retroactive
- Underwritten by RICS insurer
- Cover past and present employees
- Run off cover
Has RICS publushed info on PII
UK Professional Indemnity Insurance Requirements
Purpose of having PI insurance
- If firm faces claim, its protected from financial loss it cant meet from its own resources
- Ensures firms clients dont suffer financial loss, which firm cannot meet
Measures taken to avoid PII claims
- Keep record of meetings and conversation
- Record advice given
- Use proper letters of engagement, appointment contracts
- Avoid providing advice outside expertise
- Follow RICS professional standards and practice information
- Follow RICS rules of conduct
- Follow company procedures
A friend asks for help on house extension and they ask for technical advice for free outside of work, what do you do
- My firms PII would not cover me so decline
- Potential conflict of interest
- Suggest friend contacts firm to discuss formal appointment
