Professional Indemnity insurance is a specialist type of insurance designed to protect professionals who give advice as part of their service. It will protect them from any financial risk associated with a lawsuit and maintain their business stability and reputation in the event of a claim against them.
The professional body for surveyors, the Royal Institute for Chartered Surveyors requires all RICS-regulated firms to have adequate and appropriate professional indemnity insurance policies in place under the requirements of their Rules of Conduct for Surveyors.
However, understanding the correct level of professional indemnity insurance cover that you need for your practice can be a challenge. Whether you’re a new surveyor starting out with your own practice, or your client base (and therefore level of cover) has changed, this blog post will cover everything you need to know about safeguarding your surveyor practice.
Why does a surveyor need professional indemnity insurance?
1. Protection against errors and omissions – such as any mistakes or incorrect advice that they give which result in a financial loss for their clients
2. Client requirements – often the client will require PI insurance as a condition of issuing any contract, giving them complete peace of mind
3. Legal defense costs – might be required to defend against a claim, even if it is unfounded. Legal bills can be costly and time-consuming so PI insurance will cover legal fees, lawyer costs and court costs
4. Regulatory compliance – in many instances, the professional body requires all practicing surveyors to have Professional Indemnity insurance in place in order to practice
What will happen if you don’t have the correct level of Professional Indemnity insurance in place?
Without the correct level of Professional Indemnity insurance in place, surveyors are personally responsible for any compensation payments, legal fees or costs which are made against them. For many large projects, these costs would be substantial and potentially run into millions of pounds.
Any claim of poor advice from a surveyor has the potential to damage the surveyor’s professional reputation. This might lead to a loss of confidence in your existing clients, who may seek services from an alternative surveyor. In addition, this may damage your professional reputation and prevent you from winning new business.
Not only does a lack of correct Professional Indemnity insurance put a strain on your business, but it can also be extremely stressful and time-consuming and have a detrimental impact on everyone who works in the surveying practice.
What should a Professional Indemnity insurance policy cover for a typical surveyor practice?
Every surveyor practice will need a different amount of Professional Indemnity insurance, but a specialist Professional Indemnity insurance broker will consider:
1. Coverage amount
Making sure the policy has an adequate coverage limit. This will vary depending on the scale and nature of the projects the surveyor undertakes.
2. Scope of coverage
Looking out for the relevant activities and services that are included in the policy and make sure the services you cover for clients are included.
3. Exclusions and limitations
Any insurance policy will have exclusions, which means there are some circumstances where an insurance claim would not be covered.
4. Retroactive cover
Make sure your Professional Indemnity insurance policy includes retroactive cover, to protect against claims that arise before the policy was in place. This is particularly important if you are a surveyor and starting your first policy.
5. Geographical coverage
This might be useful if, as a surveyor, you work internationally. Some Professional Indemnity insurance policies will include global cover, but not all, so this is worth checking.
6. Regulatory compliance
Your professional body may require that you take out a particular Professional Indemnity insurance in order to practice.
What are the likely claims against a surveyor that a Professional Indemnity insurance policy would need to cover?
There are a number of reasons why a surveyor might need to make a claim against their Professional Indemnity insurance:
· Incorrect property valuation
· Boundary disputes
· Structural survey errors
· Planning permission errors
· Environmental assessments
· Negligent advice
· Failure to adhere to regulations
· Missed deadlines
· Survey report errors
· Professional misconduct
How to choose the correct level of PI cover?
The level of Professional Indemnity cover you need will depend on the nature of the surveying work you do, the client profile you work with, and the level of risk involved. Speaking to a professional indemnity insurance expert will help you to determine the correct level of cover you need, providing complete peace of mind that you have the right level of professional indemnity insurance in place for the type of surveying work you undertake.
How can I find out more about Eggar Forrester’s Professional Indemnity insurance?
If you are a surveyor and offer advice to clients, then you must make sure you have the relevant level of Professional Indemnity insurance.
Get in touch with our expert team today to find out more about Professional Indemnity for your surveying practice.
Jamie Underwood
Jamie is an Associate Director at Eggar Forrester Insurance and has more than 15 years’ experience offering Professional Indemnity for clients in the UK and abroad. Jamie can also provide insurance solutions to the financial sector offering Professional Indemnity (PI), Directors & Officers (D&O), Crime and other covers.
You can connect with Jamie on LinkedIn.