Spiralling insurance premiums provoke call for an institution-backed risk fund for surveyors
Andrew White
Huge hikes in professional indemnity insurance have driven surveyors to demand that the RICS set up a fund to protect them against major claims.
Surveyors are pushing for a shared-risk fund to deal with claims in excess of £10,000 per £100,000 of gross fee income.
Following the terrorist attacks of 11 September and continuing global economic uncertainty, some surveyors have found that insurers are demanding renewal premium increases of 300%.
Timothy Balderston, a partner of regional firm Brown & Co and leader of a coalition of like-minded agents, claimed that the RICS had the potential to form a £50m fund. He said: “I call upon the president and officers of the RICS to represent those facing these massive premium increases and explore the concept of a shared-risks fund.”
He explained that a sole practitioner, with an annual turnover of £100,000 for example, could pay a levy to the RICS insuring them against the first £10,000 of any claims that might be issued.
“Further funds could also employ a small team of surveyors skilled in dispute resolution to process claims, assisted where necessary by solicitors,” Balderston added.
But Emma Hastings, the RICS’s insurance manager, said: “We had anticipated the problems likely to be caused by rising premiums and are already investigating ways to help members in these difficult times. We have had a number of enquiries and we will consider such a fund, but it may raise as many issues as it solves.
“If the RICS were to collect a levy it would in effect become an insurer, such as the old Law Society mutual, which left the Law Society with huge debts,” she said.
Surveyors are also urging the RICS to warn the public that fee increases are the result of the huge increases in premiums following the terrorist attacks.
