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Flashcards in Policy Documents Deck (22)
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1

What is the purpose of RICS policy documents?

Set out the rules and procedures which govern RICS regulation

2

What are some key RICS policy documents?

RICS Guide - Professional indemnity insurance requirements (2019)

Rules for registration of firms

RICS professional and ethical standards

Client's money

Disciplinary procedures

Complaints handling procedures

3

What is the purpose of PII?

To protect firms from financial loss in the event of a negligence claim and consequences to pay third party damages

To protect clients from financial losses which the firm cannot meet

Mandatory for surveyors and firms working in practice

4

Under which rule of the RICS ROC for firms does PII come under?

Rule 9 of the Rules of Conduct for Firms - Firms must have adequate PII cover under RICS

5

What if the minimum level of indemnity based on?

Based on the firms turnover in the previous year

6

What must the PII include / cover?

On an each and every claim basis / fully retroactive (covers claims made during insurance cover period irrespective of when original act occurred)

Include the RICS minimum policy wording

Provides a minimum level of indemnity based on turnover

Provides a maximum level of uninsured excess

Underwritten by a RICS approved insurer

Covers past and present employees

Includes run-off cover when a firm or member ceases to trade

7

What are the minimum levels of indemnity based on firm turnover?

Firm turnover < £100k = min. level of indemnity £250k

Firm turnover £101k-£200k = min. level of indemnity £500k

Firm turnover >£201k = min. level of indemnity £1m

8

What are the maximum uninsured excess levels based on limits of indemnity?

Limit of indemnity £500k = 2.5% of sum insured

9

What is Run-Off Cover and what is the minimum duration?

To ensure firms, members and their customers are still covered in period following a firm ceasing to trade

The minimum run off cover is 6 years

10

What is the required run-off cover for consumers?

Required limit of £1m for a period of 6 years from expiry date of the policy in force at the time of cessation

11

What is the Run-Off Pool?

Firms that are unable to obtain run-off from their incumbent insurer / the open market = able to apply for coverage to the Run-off Pool

12

What is the difference between a liability cap and a firm’s PII limit?

PII limit = set out in firm’s PII policy and is fixed on the annual PII renewal; it is the maximum amount insurers will pay in any particular claim

Liability cap = agreement between a member and their client, fixed when they enter into valuation engagement

13

What should you do if a PI Claim is made against you?

Notify the insurer immediately - if necessary they can give advice on how to proceed

14

Does PII cover work for charities, friends and pro bono (unpaid) work?

If you are a qualified surveyor employed in a firm you must obtain agreement from employer to carry out such work (they may or may not agree)

If they don’t agree - you will need your own PII insurance

If they do agree - they must obtain specific agreement of their insurer to provide this cover

15

What if you are retiring / conducting part-time work?

If you're a member who has retired / ceased trading, RICS require you to maintain PII run-off cover for 15 years

The firm’s PII should cover part time employees as with normal employees

16

What is an Assigned Risk Pool (ARP)?

A facility for Regulated Firms who find themselves unable to obtain insurance in normal market (where they do not comply)

ARP = underwritten by all RICS Listed Insurers

Aim of ARP = make a Regulated Firm an insurable risk again in the normal market

Firms can remain in ARP for a max 3 years during which they are audited and guided in how to amend business procedures/practices

Membership = subject to compliance with the terms and conditions of entry

The ARP is managed on behalf of RICS by Miller Insurance Services

17

What is Vicarious Liability?

Dictates that an employer is responsible for negligent acts / omissions of his employees when acting in the course of their employment

But this does not remove employee’s potential liability

Although the employee may not have a contractual obligation to client, he will incur a direct liability to client in Tort

18

What happens when a duty of care is breached?

When a duty of care is breached = LOSS = DAMAGES = NEGLIGENCE CLAIM

19

What is Investland's PII Policy?

Investland does not have this, but it does have a Management Liability Insurance cover

Differs from PII where PII covers the ‘activities’ of a business whereas Management Liability Insurance covers the ‘running’ of a business and covers against 'mismanagement' for losses sustained by third parties

o Investland MLI covers (for 1 year);

20

What does the Investland MLI cover?

Directors and Officers Liability - £2m

Corporate Legal Liability - £1m

Employment Practices Liability - £500k

Benefit Plan Liability - £25k

Employee Crime - £25k

Kidnap and Extortion Expenses - £25k

Cyber Liability and Incident Response Expenses - £25k

21

What is a Non-Disclosure Agreement?

A Confidentiality Agreement / secrecy agreement and a legal contract between at least two parties outlining confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties

22

How should a surveyor maintain confidentiality?

Confidentiality = a primary professional duty.

RICS ROC expect members to treat information / advice relating to a client confidential, unless client agrees otherwise in writing

However, a member may disclose advice or information if required by legislation / order of a court / giving evidence as an expert witness

Key legislation = Data Protection Act 1998: individuals are protected under the Act concerning data about themselves