Do I need Professional Indemnity Insurance (PII)?
Any client or member of the public, with a legitimate claim against a member of the RTPI, has a right to expect that member to have the means of meeting the claim.
Therefore to help you decide whether you need professional indemnity insurance, ask yourself the following questions:
- Are you a director or partner in a firm offering planning services to the public?
('planning services' covers all work which RTPI members hold themselves out as being professionally qualified to undertake. It includes training but does not include teaching or lecturing. The 'public' includes professional, corporate and institutional clients.)
- Are you employed in a firm offering planning services to the public where your name is published on business stationery, the firms website, and/or any other business communication or material? (this question does not apply to members employed by Local Authorities)
(Members employed by a firm offering planning services must ensure they hold appropriate PII cover under the firms insurance, or alternatively hold their own PII insurance.)
- Are you a consultant to a firm offering planning services?
- Are you a consultant offering planning services?
- Do you undertake planning services for clients, or offer voluntary advice, on an ad hoc or occasional basis?
- Do you act as an unpaid, voluntary professional planning adviser to organisations or individuals (including family, friends and acquaintances) otherwise than as a registered volunteer with an RTPI Planning Aid service?
If your answer to any one or more of the above questions is 'yes' then you will be subject to the RTPI's professional indemnity insurance regulations in the RTPI's Code of Professional Conduct
What type of cover will I need?
The minimum cover required is as follows:
- £100,000 for each and every claim if in the preceding year your practice's gross income was less than £40,000; or
- two and a half times the gross incomefor each and every claim if it was between £40,000 and £200,000; or
- £500,000 for each and every claim if more than £200,000;
The policy must have a maximum uninsured excess (i.e. the amount the practice has to find from its own pocket for any claim) of:
- not more than £7,500 if the limit of indemnity is £250,000 or less;
- not more than 2.5% of the sum insured, or £10,000, whichever is greater, if the limit of indemnity is more than £250,000.
Further information on the levels of cover
Howden, the RTPI's Preferred Insurance Broker, also offers a cost-effective option for members who offer free advice, or whose income from uninsured advice is £20,000 or less per annum.
Run off cover
Professional indemnity insurance is provided on a claims-made basis. You will only be protected if cover is in place in the event of a claim being made against you, rather than the date when the relevant advice was given. Members are strongly advised to consider holding run-off cover for a period of six years after they have ceased trading.