Plastering over the cracks
You know there’s little margin for error in your work. Precision is everything, and sketchy measurements, malfunctioning equipment and minor miscalculations can cost you dear. The same goes for oversights.
A three-metre discrepancy in a boundary placement, tell-tale signs of subsidence that somehow slipped under the radar, and poorly managed projects can all mean a blot on your professional landscape.
The inevitable outcome in these and similar sticky situations is a hit to your client’s pocket – a hit they’ll want compensation for. That means you’ll need deep pockets of your own: if an entire building scheme’s gone off plan and it’s your fault, the cost could run into £000s.
The Royal Institute of Chartered Surveyors (RICS) recognises that surveyors can make expensive mistakes. It’s why it insists members have professional indemnity insurance (PI). In fact, it’s so keen on it that it even offers its own PI guidelines (worth a read).
Two of the things RICS flags up are:
The first is important for surveyors because claims for damages often arise some time after the work in question was completed. However, for a claim to be covered, PI must have been in place at two points:
- When the work was done
- When the claim is made
… as well as continuously in between.
That ‘in between’ bit is important. It’s why, if you’re changing insurers, you should make clear to them you’ve had PI previously. That means you’ll benefit from retroactive cover under your new policy for any work you did while your previous policy was running.
Run-off cover is equally important because it protects you after your business stops trading. It takes care of claims that come in after, and RICS members need to have a minimum of six years’ worth.
How much is enough?
RICS has something to say about how much cover you need, too. It sets minimum levels, which you can check here. Don’t forget some things will raise your ‘risk profile’ and affect whether or not you need more cover – for example, if you work around asbestos, carry out lending valuations, or manage construction projects.
RICS also says PI policies should be in the form of ‘any one claim‘. That means, if you buy £250,000 worth of cover, your insurer pays out damages up to that amount for each claim against you, rather than a total for all claims. Legal costs for each are also covered separately up to the same level.
When all’s said and done, fighting claims can be a costly, time-consuming and damaging business. Far better to let your PI take the strain instead.