Property Consultant Professional Indemnity Insurance
Commercial property advice often involves strict deadlines and procedural requirements. A break notice served late or incorrectly, a rent review clock missed, a counter notice not given in time: the opportunity to take the relevant action may be lost, and the loss is the difference between the position the client is in and the position they would have been in.
That is what separates this work from building surveying. A building surveyor's claim is usually about an opinion on the fabric of a property; a property consultant's claim is more often about a procedural step that had a deadline attached and was not taken, which leaves very little room to argue about reasonable skill and care.
Valuation and negotiation judgement produce the other half. A rent settled too high, a dilapidations liability negotiated badly, or a rates assessment not appealed in time all produce a quantifiable loss for the client, and quantification is straightforward because the alternative position can be calculated.
We can advise commercial property consultancies on professional indemnity including RICS requirements where regulated, and on the deadline management that decides most claims in this class.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Notices and statutory deadlines
Break notices, rent review triggers, counter notices under the Landlord and Tenant Act and rates appeal windows. A missed or defective notice usually cannot be remedied, and the loss is the whole value of the right lost.
Rent review and lease renewal advice
A rent agreed above the market, or a renewal negotiated on terms that damage the client's position for years. The loss is calculated over the term, which makes it far larger than the fee.
Dilapidations
Advising a landlord or tenant on terminal dilapidations. A schedule that overstates or understates liability, or a settlement later shown to be wrong, produces a claim from whichever side lost out.
Business rates and appeals
Rating advice, appeals and deadlines. Where an appeal is not made in time or an assessment is not challenged, the client pays rates they should not have paid for the whole period involved.
Agency and disposal advice
Advice on marketing, price and terms when disposing of or acquiring commercial property. Misrepresentation of a property's position, or advice to accept a price later shown to be below market, produces claims from clients and sometimes from purchasers.
The cover we arrange
We arrange professional indemnity and related insurance around the services you provide, the clients you work with and the contractual requirements you face. The appropriate cover and limits will depend on your individual activities and the terms available from insurers.
Professional indemnity
Claims arising from negligent property advice, negotiation, notices and reporting, on RICS minimum terms where the firm is regulated.
- Negligent advice and negotiation
- Notices and procedural steps
- RICS minimum terms where regulated
- Defence costs per the terms
Valuation exposure where undertaken
Where the practice also values, that is rated separately and needs stating, because valuation claims have a different severity profile from advisory work.
- Rated separately from advice
- Lender valuations if undertaken
- Highest value handled
- Aggregation of related claims
Client money where held
Where rent, deposits or service charge funds pass through the practice, that brings scheme requirements and a fidelity exposure distinct from professional negligence.
- Client account requirements
- Fidelity and theft by staff
- Payment redirection fraud
- Declared where applicable
Public liability and inspection
Injury and damage during inspections of commercial property, including vacant units, roofs and plant rooms.
- Inspections and site visits
- Vacant and derelict property
- Employers' liability, legally required
- Damage to occupied premises
Run off
Continuing cover after the practice closes, required by RICS where regulated. Lease advice is tested at the next event in the lease, which may be years away.
- Required by RICS where regulated
- Claims arise at the next lease event
- Commonly six years
- Arranged before ceasing
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Fee income split between lease advisory, rent review, dilapidations, rating, agency and management
- Whether valuations are undertaken, and for whom
- Whether client money is held, and under which scheme
- The largest property by value and the largest lease by annual rent advised on
- Diary systems for notices, review dates and appeal deadlines
- Whether expert witness or arbitration work is undertaken
- RICS regulation status and the qualifications of advisers
- Claims and notified circumstances over the last six years
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Whether valuation is undertaken
The largest single differentiator, as in all surveying classes. Advisory only practices are rated well below those with valuation income.
Property and rent values
The scale of the leases and properties advised on, since the loss on a missed review or notice is calculated over the term.
Deadline management systems
Documented diary systems with independent checking of critical dates matter more here than anywhere else on the hub, because missed dates are the least defensible claims.
Client money
Holding rent or service charge funds adds a fidelity exposure and scheme obligations, and it is rated separately from the advisory work.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
Work outside the agreed instruction
Defence rests on what the practice was instructed to do. Where diary management of a client's lease events was never part of the instruction, the position on a missed date is entirely different.
Dishonesty and client money
Theft of client funds is excluded for the individual involved and answered by fidelity cover instead, which is why the scheme requirements exist separately from the indemnity policy.
Market movement
A rent or price that looks wrong because the market moved is not negligence. The test is whether the advice was reasonable on the information available at the time.
Fee disputes
Recovery of unpaid fees is a commercial matter, though it is a frequent trigger for a negligence counterclaim about the advice given.
Common questions
How is this different from a building surveyor?
Building surveying claims are about the fabric of a property and the opinion given on it. This work is about leases, rents, rates and dilapidations, where a common claim is a procedural step with a deadline that was not taken. The defences are different, which is why the cover is presented separately.
We missed a break notice date. What happens now?
Notify your insurer straight away, because the loss is usually the rent for the remainder of the term and it is easy to quantify. Whether you are liable depends on whether monitoring that date was part of your instruction, which is a question about your engagement letter rather than about your judgement.
Do we need to hold client money to do this work?
Not necessarily, and many advisory practices deliberately do not. Where you do, scheme requirements and a separate fidelity exposure apply, so it is worth being clear about whether handling rent or service charge funds is a service you actually want to offer.
A client says we agreed too high a rent at review.
The test is whether the advice was reasonable on the comparable evidence available at the time, not whether the figure looks wrong now. Keep the comparables, the reasoning and the client's instructions on the file, because that contemporaneous record is the whole defence.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.