Random Flashcards
(114 cards)
What is the purpose of indemnity insurance
To ensure that if the firm faces a claim it is protected from financial loss it can’t meet from its own resources
Protects firm / member from its liability to paying damages to third parties (for breaches to professional duty)
Ensure clients don’t suffer financial loss which the firm can’t meet
What are the RICS indemnity insurance requirements
‘Adequate and appropriate’
Fully retroactive
Covers past and present employees
Minimum level of indemnity
Turnover
£100> = £250k
100,01-£200 =£500
£200,01< = £1mil
Maximum level of uninsured excess
£10mil > = £10k / 2.5% sum insured (whichever is more)
£10mil£1 = no limit
What is run-off cover
To ensure that firms, members and their clients are not exposed to financial detriment in the period following a firm ceasing to trade
15 year long-stop period
What is contractors all risk insurance
all-risk insurance covers the risk of damage or destruction to buildings as work is carried out on them.
What insurances must contractors have
employer’s liability for employees, and for any persons for whom the subcontractor may act as labour master
professional indemnity insurance, to cover financial loss to third parties as a consequence of an error or omission in the execution of the subcontractor’s professional activities.
public and products liability, for injury or damage to third parties or their property
Types of dilapidations survey
interim (during the lease)
terminal (usually within the last 18 months of the term)
final (usually after the lease has expired).
Limitations of protimeter
-measures electrical resistance, not damp. provides an indication of the moisture content of timber
-The readings can be affected by things like timber treatments and wall finishes (plus other things.)
-Can give unreliable results in any material other than clean un-treated timber.
Construction methods?
What is the defective premises act
The DPA 1972 imposes a duty on those constructing, designing, or carrying out work on dwellings to ensure they are fit for habitation.
What is the liability period under the DPA?
Originally, claims had to be made within 6 years of completion. However, under the Building Safety Act 2022, this has been extended:
30 years for work completed before June 28, 2022
15 years for work completed after this date
How can a surveyor limit their liability through terms of engagement?
By including clear disclaimers, liability caps, and exclusions for third-party reliance.
How can failing to follow the RICS Code of Conduct lead to disciplinary action or legal liability?
Non-compliance can result in fines, suspension, or expulsion from RICS, as well as increased negligence risk.
What are the main types of insurance contractors should have?
Public liability insurance – Covers injury or property damage to third parties.
Employers’ liability insurance – Legally required if employing staff. Covers injury/illness claims from employees.
Contract works (all-risks) insurance – Covers ongoing construction work against damage (e.g., fire, theft, weather).
Professional indemnity insurance (PII) – Protects against claims of negligence in design or advisory roles.
Product liability insurance – Covers claims related to faulty materials/products.
Latent defects insurance (structural warranty) – Covers major building defects post-completion.
What are the RICS minimum PII requirements?
Firms with turnover under £100,000 – Minimum cover of £250,000.
Turnover £100,000–£200,000 – Cover of £500,000.
Turnover over £200,000 – Minimum of £1 million.
Maximum uninsured excess:
£10m = 2.5% of sum insured / £10k (whichever is more)
£10m< = no limit set
Q14: What is the difference between performance bonds and insurance-backed guarantees?
Performance bonds – A financial guarantee that a contractor will complete a project.
Insurance-backed guarantees – Cover defects in work (e.g., roofing) after completion, even if the contractor goes out of business.
How can a surveyor ensure they comply with RICS insurance requirements?
Refer to RICS liability and insurance
Review policy limits annually.
Use RICS-approved insurers.
Ensure PII covers their full scope of work.
Maintain run-off cover when ceasing business.
How should a building surveyor handle a conflict of interest under RICS Rules of Conduct?
Identify and disclose the conflict in writing.
Seek client consent before proceeding.
Avoid the instruction if impartiality cannot be maintained.
Maintain a record of the conflict and actions taken.
DPA 1972 & liability?
The Defective Premises Act 1972 (DPA) sets out legal duties for builders, developers, and landlords to ensure that residential properties are fit for habitation
The Building Safety Act 2022 introduced major changes to extend liability periods under the DPA:
For New Claims (After 28 June 2022)
15 years from the date of completion of the defective work.
This applies to any work done after 28 June 2022.