Professional Indemnity

This is potentially the best known and talked about insurance that a property professional can purchase and is believed by many to be the most important. Your clients will rely on the advice and services you give them, or fail to give them, and will only be too quick to blame you when they suffer any form of financial loss (or perceived financial loss).

In this current economic climate, and with falling house prices some of your clients may be facing or already experiencing financial losses, in particular developers and mortgage companies, some of which will be keen to look for ways to recover their losses and you may find yourself in their firing line. Even if you have done nothing wrong it is crucial you have adequate professional indemnity insurance as defence costs can become very expensive.

Members of the RICS will already be aware of the mandatory requirements imposed upon them in respect of this type of insurance. This should not be viewed however as just a compulsory purchase that you have to suffer. This is a vital and important business tool that you cannot afford to trade without.

It is important that you understand how professional indemnity insurance works, and what exactly it is you are getting for your money. At Anchorman we are very happy to spend time explaining what is covered and importantly what is not. Should the worst happen you need to know you have the right insurance.

Professional indemnity is written on a "Claims Made" basis

In essence the policy only covers claims notified during the period of insurance and is not specifically covering work undertaken during the policy term. For example, if you undertook a survey in 2006, and then in 2008 you were advised by the client of a possible claim, you could not claim against the policy you had in 2006, but would in fact claim against the current policy that was in force when you were first notified of the claim in 2008. You could have changed insurers since undertaking the survey, but it would still be the new insurer that dealt with the claim.

This can be a little confusing to comprehend, but it is crucial that you do fully understand it.

Retroactive Date

Although the policy deals with claims notified within the current policy term as described above "on a claims made basis". The policy schedule will also state a retroactive date. This retroactive date is how far back they will cover previous work you have undertaken, and will often be the same date as you started your practice. It is therefore of paramount importance that you ensure the retroactive date goes back far enough to cover all work you have ever done. To ensure all work is covered it would be prudent to have the retroactive date shown as unlimited, either way this needs to be discussed with your insurance adviser when arranging the policy to ensure there is no previous work not covered.

Run off Insurance

As professional indemnity insurance is written on a claims made basis, it is crucial that you maintain insurance cover even after you have ceased to trade or retire. This is referred to as Run off insurance. Due to the type of work that you undertake, it is conceivable that a claim could be made against you many years later. As you can only claim against a current policy of insurance it important that you continue to maintain cover for a certain period of time after you cease to trade or retire. As for how long you should maintain this cover is a question of personal choice and legal advice should be taken on this matter, however RICS members must arrange a minimum of six years cover from the date they ceased trading or retire. We are able to offer six-year block run-off quotes under both our In-house Schemes!

How much does Professional Indemnity Insurance Cost?

The cost of professional indemnity insurance will vary from one client to another, the premium will depend on many issues, the main being your gross fee income, the type of work you undertake, the limit of indemnity you require and your previous claims history.

Minimum premiums do apply and the amount will vary from insurer to insurer. Anchorman has always been well known for offering some of the lowest minimum premiums in the market place.

Remember both of our In-house schemes are exclusively available through us and cannot be arranged through any other outlets, the minimum premiums we have on offer are in many cases lower than those available elsewhere.

How do I obtain a quotation?

Getting a quotation could not be much easier. Either telephone us on 01837 55777 and we will take the details and in most cases provide an immediate quotation. Alternatively complete the quote request and we will telephone you back.

Useful information sheets & brochures (downloadable PDF)

» Anchorman Terms of Business