Professional Practice, Insurance, Complaints & Ethics

Question 1

What are the 5 ethical Standards

Answer 1

1. Act with Integrity
2. Act in a way that promotes trust in the profession
3. Treat others with respect
4. Take responsibility
5. Always provide a high standard of service
   * Will be updated with (Accountability)

Question 2

What are the main roles of RICS

Answer 2

1. Protect the interests of consumers and business through strict regulations of the profession
2. Maintain the highest standards of education and training in the surveying profession
3. Be the leading source of information and independent advice on land, property, construction and environmental issues
4. Act in the public’s interest

Question 3

What are the benefits of Joining the RICS

Answer 3

STATUS 
RECOGNITION 
MARKET ADVANTAGE 
KNOWLEDGE 
NETWORK

Question 4

What are the Rules of Conduct for Firms ?

Answer 4

Professional Behaviour
Competence 
Service 
Training and CPD 
Complaints Handling 
Client Money 
Indemnity 
Use of designation 
Advertising 
Arrangements in the event of incapacity or death 
Solvency 
Information to RICS 
Co-operate with RICS

Question 5

What are the Rules for Members

Answer 5

Ethical Behaviour
Competence 
Service 
CPD
Solvency 
Info to RICS 
Co-operation with RICS

Question 6

What is the required amount of CPD required by a RICS member

Answer 6

10 hours formal

10 hours informal

Question 7

What are the five principles of better regulation

Answer 7

1. Proportionality
2. Accountability
3. Consistency
4. Targeting
5. Transparency

Question 8

What do you need to set up an RICS firm

Answer 8

• Fill out registration form
• Appoint responsible person and complaints handling officer
• Indemnity Insurance
• Approval of Complaints Handling Procedure
• Client Money
• Arrangements in the event of incapacity of death
• Training Plan

Question 9

What is PII and what is it’s purpose ?

Answer 9

Professional Indemnity Insurance (PII):

1. Protects firms against losses resulting from professional negligence, errors and/or omissions which cause financial loss to a third party
2. Ensures a firm’s clients do not suffer financial loss which the firm cannot meet

Question 10

What does the RICS state about PI insurance?

Answer 10

Rule 9 of the RICS Rules of Conduct for Firms requires all regulated firms to be covered adequate and appropriate PII which meets the standards approved by the Regulatory Board.

Question 11

What should a PII policy contain?

Answer 11

1. Must be on a claims made basis
2. Must be on an each and every claim basis
3. Policy wording is written on a full civil liability basis
4. Underwritten by a listed insurer
5. Covers past and present employees
6. Run-off cover
7. Minimum level of indemnity required by the RICS

Question 12

Explain the term ‘claims made basis’.

Answer 12

A ‘claims made’ basis covers claims that are made and reported during the policy period only and not once the policy period is over.

Question 13

Explain the term ‘each and every claim basis’.

Answer 13

The limit of indemnity covers each claim individually (instead of a accumulatively for that year, which is referred to as ‘in the aggregate’)

Question 14

What does having the PII policy written on a full civil liability basis mean?

Answer 14

A full civil liability basis means if a claim isn’t specifically excluded, it’s included (as opposed to a ‘negligence only’ policy, where if a claim is not specifically included, it’s excluded)

Question 15

What happens to PII when you retire?

Answer 15

Run-off cover ensures firms, members and customers are not exposed to financial detriment in the period following a firm ceasing to trade or a member’s retirement

Question 16

How would you determine what is sufficient in terms of PII runoff cover?

Answer 16

Should be for a minimum of 6 or 12 years, depending on how the contract was executed, however negligence claims can be made up to 15 years after work was undertaken - advice from an insurance broker should be sought as to whether to maintain for the full 15 years

Question 17

What are the minimum levels of PII based on?

Answer 17

Minimum level of indemnity is based on the firm’s turnover in the previous year (or estimated for a new firm)

Question 18

What are the minimum levels of PII required?

Answer 18

1. £100,000 or less turnover = min. £250,000 indemnity
2. £100,001 to £200,000 turnover = min. £500,000 indemnity
3. £200,001 and above turnover = min. £1,000,000 indemnity

Question 19

What is meant by the term ‘maximum level of uninsured excess’?

Answer 19

The part of each claim the firm must pay itself

Question 20

What are the levels of maximum uninsured excess?

Answer 20

1. Up to and including £500,000 indemnity = the greater of 2.5% of the sum insured or £10,000
2. Over £500,000 indemnity = 2.5% of the sum insured

Question 21

What is generally excluded from PII cover?

Answer 21

1. Material damage
2. Theft
3. Personal injury
4. Damage to third party property
5. Work carried out prior to the inception of the policy
6. Insured v insured claims (i.e. a company suing an employee for professional negligence)
7. Insolvency

Question 22

What should you do in case of a potential claim on your PII?

Answer 22

Must notify insurer in the event of:

1. An actual claim
2. A written or verbal threat of a claim
3. Any circumstance that the firm has reason to believe may result in a claim
4. Any complaint notified via the firm’s CHP