Professional Indemnity (PI)

Question 1

what is PI insurance?

Answer 1

professional indemnity is to provide insurance cover for breach of contract & negligence - ANY CLAIMS

It protects both parties.

Question 2

what does ‘claims made’ basis mean

Answer 2

This means payment will be made for a claim made under the current policy, even though the incident (or alleged incident) took place years ago.

Question 3

what is a retroactive date in PI insurance terms?

Answer 3

A retroactive date is a date from which PI insurance policy has been in place (even if I changed insurance provider during this time)

Question 4

what are rics requirements in terms of PI?

Answer 4

1. We must have adequate and appropriate professional indemnity insurance.
2. it must be proportional to risk and work carried out.
3. The policy must be on a ‘claims made basis’.
4. must have run-of cover for min 6 years.

Question 5

what are rics rules on minimum level of cover?

Answer 5

£ 100,000 or less = £ 250,000 limit of indemnity
£ 100,001 to £ 200,000 = £ 500,000 limit of indemnity
Over £ 200,000 = £ 1,000,000 limit of indemnity

Question 6

what changes did the rics make recently to the minimum approved PII wording?

Answer 6

On the Fire safety exclusion.
On 1 May 2021 any exclusion WILL NOT APPLY to professional work relating to buildings four storeys or under.
- I had to seek advice from my insurers as some buildings I work on can be 5-6 storeys, however Allianz excepted my work and provided cover.

Question 7

Indemnity meaning ?

Answer 7

An indemnity is a contractual obligation of one party to compensate the loss incurred by another party due to the relevant acts

• COMPENSATING A PARTY FOR A LOSS