Surveyors Professional Indemnity Insurance
A surveyor's report is relied on to make a decision that is expensive to reverse. Somebody buys a house, a lender advances money against it, or an owner proceeds with works, and if the report missed something the financial impact can become apparent quickly in the price paid.
Valuation is the sharpest part of the exposure. A negligent valuation claim is straightforward to quantify, because the difference between the figure given and the figure that should have been given is the measure of loss, and valuation claims can become more significant during periods of falling property values.
Survey work carries a different profile. Claims arise from what was not inspected as much as from what was, and the level of service agreed decides what the surveyor undertook to do. A Level 2 survey does not promise what a Level 3 does, and the report needs to say so clearly.
We can advise surveying practices on professional indemnity including the RICS minimum terms, valuation exposure, party wall work and the run off that follows a practice closing.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Negligent valuation
A figure that proves too high, relied on by a lender or a purchaser. These claims cluster when property values fall, which means an insurer can face many at once from the same practice, and that concentration is part of how the class is rated.
Defects missed on survey
Damp, timber decay, structural movement and roof defects that the buyer finds after completion. Whether the surveyor should have found it depends on the level of service agreed and on what was accessible, which is why the report's limitations must be explicit.
Scope and the level of service
Clients rarely distinguish between survey levels. Where the difference between what was bought and what was expected is not clearly recorded, the expectation tends to prevail in the client's mind and forms the basis of the complaint.
Party wall work
Acting as party wall surveyor brings statutory duties and a role that is not simply advisory. Awards, schedules of condition and disputes between neighbours produce claims and complaints of a character quite different from ordinary survey work.
Fire safety and EWS assessment
Where a practice carries out external wall assessments, it enters the most restricted area of the professional indemnity market, and the terms available change materially as a result.
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 on RICS minimum terms
RICS regulated firms must hold cover meeting the minimum terms, which fix certain features including the treatment of defence costs and an aggregate limit with one reinstatement.
- RICS minimum terms where regulated
- Negligent survey, valuation and advice
- Claims made basis
- Defence costs treated per the minimum terms
Valuation exposure
Cover for valuation work specifically, which insurers rate separately from survey work. The split of income between the two is one of the first questions asked.
- Lender and purchaser valuations
- Rated separately from survey work
- Limits often set by lender panels
- Aggregation of related claims
Party wall and expert work
Statutory party wall appointments, schedules of condition and expert witness work where undertaken. Each is a distinct activity and should be disclosed rather than assumed within general surveying.
- Party wall awards and appointments
- Schedules of condition
- Expert witness work
- Disclosed as separate activities
Run off
Continuing cover after a practice closes, which RICS requires for a minimum period. Survey and valuation claims often arrive several years after the report, so the period matters.
- Required by RICS on closure
- Claims arrive years after the report
- Commonly six years
- Arranged before ceasing to trade
Public liability and cyber
Injury and damage while inspecting property, which on a surveying practice means climbing, roof access and entering vacant buildings, together with cover for the data the practice holds.
- Injury and damage during inspection
- Access to roofs and vacant property
- Employers' liability where staff employed
- Cyber and client data
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- Fee income split between survey, valuation, party wall, project and expert work
- Whether valuations are carried out for lenders, and for which panels
- The highest value property valued, and the typical range
- Survey levels offered, and the standard terms of engagement used
- Whether any external wall or fire safety assessment is undertaken
- RICS regulation status and the qualifications of those signing reports
- Claims and notified circumstances over the last six years
- Procedures for file retention, since defence depends on the file
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Valuation income
One of the main factors insurers consider. Practices doing no valuation work are rated far more favourably than those with significant lender valuation exposure, because of both severity and the tendency of those claims to arrive together.
Property values and type
High value residential and commercial valuation carries greater exposure per instruction. Insurers look at the highest value handled as well as the average.
Terms of engagement
Clear written terms defining the level of service, limitations and liability are the practice's main defence and are reflected in terms offered.
Claims record
This class is rated heavily on history, and because valuation claims cluster, one bad period can affect terms for several years afterwards.
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.
External wall and fire safety assessment
Widely excluded or heavily conditioned. A practice undertaking this work needs to address it directly at presentation rather than hope it passes unnoticed.
Work outside the agreed level of service
Where a claim concerns something the agreed service never included, the defence rests on the engagement terms. Vague or verbal instructions undermine that defence more than any other single factor.
Dishonesty and deliberate acts
Fraudulent valuations and deliberate misstatement are excluded for the individual involved, though innocent partners are usually protected. It matters in practices where valuations are signed by several people.
Gaps in cover on a claims made basis
A lapse between policies leaves claims notified in that period uninsured, and for a practice whose reports are relied on for years afterwards, continuity is the whole point.
Common questions
What are the RICS minimum terms?
Requirements RICS regulated firms must meet in their professional indemnity cover, covering matters such as how defence costs are handled and the provision of an aggregate limit with one reinstatement. A policy that does not meet them leaves the firm in breach of its regulatory obligations as well as underinsured.
We do not carry out valuations. Does that help?
Considerably. Valuation is the sharpest exposure in surveying because the loss is easy to quantify and claims tend to arrive in groups when values fall. A practice doing survey and project work only should make that split explicit at presentation.
How long after a survey can we be sued?
Generally six years from the breach in contract, with longer possible in negligence depending on when the damage was discoverable. In practice claims frequently arrive three to five years after the report, which is why run off on closure is a regulatory requirement rather than a choice.
Does our cover include party wall work?
Only if disclosed. Party wall appointments carry statutory duties and a role that is not purely advisory, so insurers treat it as a distinct activity. Tell them the proportion of income it represents rather than leaving it inside general surveying.
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.