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E - Professional Indemnity Insurance

The RICS Rules for Registration of Schemes (Appendix A – Registered Valuer Scheme, 4(2) obligations of registration) require you to ensure that all valuation work you carry out is covered by adequate and appropriate professional indemnity insurance.

Q1

Is all valuation work you carry out covered by professional indemnity insurance in place that complies with the Rules?

For the policy to comply with the RICS Rules then it must meet the following criteria:

  • Be underwritten by an RICS listed insurer
  • Incorporated RICS minimum policy wording
  • Be retroactive for at least 6 years, or to the date your firm began trading if this date is less than 6 years ago
  • Have a level of indemnity of at least £250,000 (highest levels are required in the firm’s turnover is over £100,000. If turnover is between £100,001 and £200,000 then the amount increases to £500,000 and to £1million if turnover exceeds £200,000)
  • The limit of indemnity must be on an each and every claim basis
  • Uninsured excess of a maximum of 2.5% of the limit of indemnity or £10,000

For further information, please see the PI Policy for:

United Kingdom
Asia

Q1a

If no, please provide details including any alternative cover the firm/organisation has.

If you do not have insurance at all, please provide reasons as to why not. If your policy does not meet the criteria required, then please provide details of how and why your cover does not comply.

Q2

Which of the following RICS regional currencies will you be using the answer the following questions?

Using the same currency for all answers will help RICS fully understand the extent of valuation activity you undertake. 

Q3

What is the limit of indemnity?

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

Firm’s turnover in the preceding year

Minimum limit of indemnity

£100,000 or less

£250,000

£100,001 to £200,000

£500,000

£200,001 and above

£1,000,000

 In order to manage their risk adequately, some firms may wish to hold a higher level of indemnity.

Q4

On what basis is cover held?

For firms in the UK: ‘Each & Every and Any on claim’ is what is accepted under the minimum terms of adequate and appropriate PI. Aggregated cover will only be considered as adequate and appropriate where there is a ‘round the clock’ reinstatement on the policy, which is only usually found on indemnity policies in excess of £2m with a layered PI policy. Therefore this is not standard and must be brought to our attention.

Q5

Is your firm’s policy fully retroactive? 

For firms in the UK: The retroactive date on a policy is the date from which business activities are insured. This can be "none" in which case all previous activities are covered; or "date specific" when only activities after that date are covered.

For your policy to comply with the RICS Rules, and be fully retroactive, then it should be retroactive to cover at least the last 6 years of activities, with no exceptions within the policy conditions. If you firm has been trading for less than 6 years the policy should be retroactive to the date the firm commenced trading.For example the policy will need to cover the work of all past directors and employees and all types of work completed in the past.

Q6

Which of the following listed insurers is your firm’s policy underwritten by? 

The policy must be underwritten by an RICS listed insurer to meet the required criteria, please advise on which insurers cover the risk on your policy from the list. If your policy is underwritten by more than one insurer, then please indicate all of those covering the risk. If all or part of your policy is not underwritten by an RICS listed insurer then please choose “none of the above”.

Q6a

If none of the above, please provide further information on your alternative arrangements.

Next page: F - Claims and Complaints