The Royal Institute of Chartered Surveyors, RICS, published its update list of “Listed Insurers” on 1st October 2011.  The RICS issue a list of insurers who have obtained listed status by meeting a number of prescribed criteria.  RICS Members are required to purchase Professional Indemnity Insurance cover from one of the listed insurers and must obtain cover on a policy wording stipulated and worded in line with a policy wording agreed between the RICS and the insurance industry.    

The criteria used by the RICS in compiling its list of insurers include the insurers authorised or recognised status, their credit rating status, their agreement to write their policy in line with certain agreed contract terms and on a no less comprehensive basis than the RICS policy wording.  Insurers must also be listed for the purpose of the assigned risk pool which is a insurance option of last resort for surveyors who are unable to obtain PI in the open market.

Whilst a PI Insurers policy wording does not need to mirror, word for word, the RICS template, it does need to duplicate the policy conditions as well as being on an any one claim, civil liability basis.  For more information about the required coverage’s and minimum required RICS limits please go to our surveyors page.

A copy of the minimum wording can be viewed on the RICS web site.

The Supreme Court last week delivered a landmark decision in the case of Jones v Kaney, effectively abolishing the immunity previously afforded to expert witnesses from claims for negligence arising out of evidence prepared for the purposes of, and in connection with, legal proceedings.

Insurers will need to consider carefully the potential ramifications of this decision.  In particular, they will need to monitor new claims notified and resulting from expert witness work (hitherto considered by insures as low risk in view of the immunity previously in place).

Insurers will need to consider the impact this ruling may have with regard to the pricing of Professional Indemnity Insurance policies for those who work in these areas.  Insurers may wish to consider whether to exclude expert witness work from standard professional indemnity policies, and then to write it back in where necessary, possibly via a specific endorsements to cover such work and with an extra premium payable, depending upon the Insurers perceived risk.

David Hedgecock

Hammond Professional Indemnity Consultants

5 April 2011

In October 2010 and as part of its commitment to protect the public interest and to raise the standards its members work to, the Royal Institution of Chartered Surveyors (RICS) has launched a new registration scheme for members undertaking valuation work.  The RICS Valuer Registration Scheme.

Whilst the scheme was launched in the 20 October it will become mandatory in the UK from 30 April 2011.   This will apply to all RICS members providing valuations in accordance with the RICS Valuation Standards (the Red Book). 

The RICS Rules require members to ensure that all valuation work carried out is covered by adequate and appropriate professional indemnity insurance.

On what basis must cover be held?

For a policy to comply with the RICS Rules in the UK 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 should 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 firms in the UK: ‘Each & Every and Any on claim’ is what is accepted under the minimum terms of adequate and appropriate Professional Indemnity Insurance.  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 the attention of the RICS

Professional indemnity (PI) premiums for small firms are set to soar by up to 30% following Quinn Insurance's withdrawal from the market.

Sandra Neilson-Moore, Marsh's European practice leader for law firms' PI, said that for the first time ever what was happening in the smaller end of the solicitors' PI market was affecting the larger firms.

Broking.co.uk

4 January 2010

The ABI said it "backs the recommendations in the report that, for a sustainable solicitors' professional indemnity market to continue, the following changes must be made:

• 
  The minimum terms of the policy, as required by the SRA, must allow insurers to set premiums that more accurately reflect the risks of work carried out.
  
• The funding of the Assigned Risks Pool (for solicitors unable to get professional indemnity insurance) needs to change to provide more incentives for the profession to deal with the small number of poorly run firms by transferring the costs of the ARP more explicitly to the profession.
  
• As with other types of insurance, insurers should be able to cancel a policy if a solicitor fails to pay its premiums. At present insurers cannot do this, so firms in difficulty find it easier to stay in business, so presenting more risk to their clients. -- The single common renewal date should be scrapped

Insurance Journal

2 November 2010