Setting up a Business Flashcards
What must you do to comply with the RICS standards for setting up a practice?
Submit a Firm Detail From to the RICS
Appoint a ‘Responsible Principle’ for all RICS communication
Register for regulation by the Regulatory Board
Arrange professional indemnity and send details to RICS
Set up procedures for Client Money Handling and
Obtain RICS approval of your Complaints Handling procedure and set up a complaints log.
Appoint a complaints handling officer.
Submit an RICS Annual Return at the end of each year.
Sole traders - plan for succession
What must you do to ensure statutory compliance when setting up a new practice?
Ensure compliance with the Equality Act 2010
Ensure compliance with the Bribery Act 2010
Appoint a money laundering ‘reporting officer’ (Money Laundering Regulations 2017)
Health and Safety compliance (Health and Safety Act 1974)
Asbestos Register for any offices (CAR 2012)
Fire Safety Compliance (Regulatory Reform Fire Safety Order 2005)
Registration for Data Protection (GDPR 2016)
Inform HMRC of VAT and Tax registration
Ensure compliance with employment law such as National Living Wage
Ensure insurance requirements for employer and public liability (EL min £5,000,000
What must you do to comply with the RICS standards for closing a practice?
Inform the RICS of your retirement
Ensure clients are informed and handover arrangements made
Return any monies held for clients
Inform insurers and procure run-off cover for a minimum of 6 years from expiry of your current policy
Retain a copy of client files for 6 years
What is the purpose of PII?
To protect the firm in the event that it faces a claim that is cannot meeting from its own resources.
To protect the member or firm against the consequences of negligence claims arising from breaches of its professional duty that are committed through professional activities.
Ensure the firms clients do not suffer a financial loss.
What are the minimum levels of indemnity set out by the RICS?
Turnover £100,000 or less = £250,000
Turnover £100,000 to £200,000 = £500,000
Turnover £200,000 or more = £1,000,000
What are the requirements for PII?
All policies must be underwritten by an RICS listed insurer
Meet the minimum level of indemnity based on the firms turnover
Policies must be full retroactive on a claims made basis
Certificate to be submitted to RICS as part of annual returns
Must obtain appropriate run off cover
What is fully retroactive insurance?
This means that the policy covers claim that are made against the insured during the period of the insurance, regardless of when the negligent act occurred. A fully retroactive policy covers all former work carried out by the firm or individual.
If retroactive date in policy is stated as none then all former work carried out by the firm will be covered.
What is run off cover?
It ensures that firms, members and their clients are not exposed financially in the period following a firm ceasing to trade by maintaining a level of PII insurance on a fully retroactive basis.
What is insurance on ‘claims made’ basis?
This means that the policy covers claims that are first made against the insured during the period of insurance regardless of when the negligent act occurred.
What are the minimum requirements for run off cover?
£1,000,000 in all for a period of 6 years from expiry of the policy in force at the time of cessation of the practice.
However, if party to contract under seal could required 12 years and for commercial claims run off cover may be required for 15 years, which is the long stop for claims for negligent latent damages.
What document sets of the professional indemnity requirements?
Professional Indemnity Insurance Requirements Version 7 (May 2020)
What is AYs PI cap?
£5,000,000
What insurances are you required to have?
Professional Indemnity Insurance
Employers Liability Insurance
Public Liability Insurance
Buildings insurance for offices
What is the statutory minimum for Employers Liability insurance?
£5,000,000
