Initiative helps professional indemnity insurance queries

Planners in the Workplace helps members to explore solutions to challenges at work, says Chris Sheridan.

The Planners in the Workplace initiative often receives letters from planners with challenges at work. In this edition, we focus on professional indemnity insurance (PII).

One consultant wrote to comment on the difficulties of working for councils because they require a high level of PII. He was required to hold £5 million worth of professional indemnity and £1 million of public liability insurance. While he considers this appropriate for large companies, he feels that it is unrealistic for smaller operations. He voiced concern that the requirement could be detrimental to local business.

This situation brings to mind a similar case that occurred when we were contacted by a public sector planner who decided to take a career break. Concerned with the loss of an experienced staff member and mindful of recruitment difficulties, her line manager asked whether she would continue to carry out work from home on a contractual basis.

Having discussed her options with the RTPI, the member went back to her employer to finalise details. It was at this point that she encountered the insurance problem. In order to continue working for her employer for 10 to 15 hours a week, she would need £2 million PII and £1 million public liability cover. She was even required to produce an equal opportunities statement, which the council requires from all contractors. Together with the cost of the annual premium this presented a significant obstacle for the member. She therefore declined the offer of work.

As a client, a council can of course request whatever levels of cover it considers to be appropriate and usually follows internal guidelines. However, the framework does not work in favour of smaller businesses. This one-size-fits-all approach makes it difficult for small businesses to compete for work. Without officer discretion, a self- employed consultant is treated in the same way as a large organisation with contracts to maintain council-owned property.

We encourage consultants working for councils to negotiate the limit down, using the RTPI's PII regulations with their suggested minimum levels of cover to strengthen their case. If councils are able to use discretion they may find that they are able to reduce their own costs by using private consultants or retain staff on career breaks with mutually agreeable terms.

Chris Sheridan is RTPI Planners in the Workplace manager.

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