Insurance policies tailored to professional indemnity need

Planning, 13 June 2008

Since the RTPI introduced compulsory professional indemnity insurance (PII) regulations in 2001, it has sought to increase the insurance industry's knowledge of the planning profession.

Planning is a much lower risk to insurers than surveying, architecture or engineering, yet underwriters often charge premiums that link planning more closely to these professions. This is partly because the insurance industry does not understand the range of activities carried out by planning consultants.

The level of PII cover consultants hold is usually influenced by the requirements of their client. When the client is a local authority, then procurement procedures can require it to request anything between £1 million and £5 million worth of cover. This is often a huge distortion of the risk level to be insured.

In practice this can work against the small business, because the authority is making no distinction between a major contractor on a multi-million pound contract and the planning consultant offering advice on policy or helping with appeals. We know that the costs of such premiums influence the decision on whether to work with particular authorities.

With the skills shortage currently facing the public sector, it makes sense for authorities to attract a wider range of potential consultants with whom to work. A flexible approach would help, combined with an insurance policy that offers high limits of indemnity, including public liability cover, yet reflects the low risk through a more competitive premium.

Insurance broker Prime Professions suggests that some planning work still gets swallowed up under surveyors' policies. Planners do not necessarily get the benefit of being seen as a stand-alone profession because there is a lack of critical mass to gain the attention of the market. The answer is to attract an underwriter who thinks that small and low risks are equally good.

Prime Professions and HCC International have come up with a policy that responds to these issues. The scheme also offers public liability and employers' liability Insurance.

Chris Sheridan is RTPI Planners in the Workplace (PIWP) manager. For more information on the Prime Professions policy, please email info@primeprofessions.co.uk. For further information relating to consultancy work, please visit www.rtpi.org.uk/member_services/piwp.