Why do Surveyors Need Professional Indemnity Insurance Cover?
Surveyors are professionals who provide a very specialised service for their clients. They determine the size and boundaries of property and it is their determinations that influence the costs incurred by their clients in the buying, selling or development of those properties.
Depending on the size of the project, if a surveyor gets it wrong, a client could be out of pocket by millions of dollars, so having a claim brought against them for those kinds of losses could financially ruin a surveyor who didn’t have appropriate cover.
As well as determining property boundaries, surveyors perform a wide range of other services including researching land ownership, analysing field note data, making maps, charts and reports and conducting records management activities.
Key areas of exposure for surveyors commonly include:
- Failing to accurately identify property boundaries
- Careless record management
- Inadequate land inspection
- Negligence in compiling maps, charts or reports
- Failing to report encroachments on property boundaries
- Providing erroneous or inaccurate documents.
Because of the precise nature of their services and the extent of the repercussions for failing to perform them adequately, surveyors are particularly vulnerable to liability claims and need Professional Indemnity Insurance as a matter of course.
What does professional indemnity insurance cover?
Professional Indemnity Insurance is how a professional protects themselves in the event of such claims. The insurance covers the costs associated with defending the claim, as well as any damages that might be awarded. It protects the professional’s assets and allows them to continue doing business.
Specific types of claims that are covered
PI Insurance normally covers claims such as:
- Defamation, slander or libel
- Loss of documents
- Erroneous or inadequate advice
- Failure to follow a client’s instructions
- Breach of the Trade Practices Act or consumer protection laws
- Breach of confidentiality
- Breach of contract
- Intellectual property infringements
- Employee dishonesty
The specific circumstances covered will vary with the policy (there are over 40 different products on the market) and professionals should look for Professional Indemnity Insurance that provides the most suitable coverage for their particular industry and area of expertise.
How to choose cover for surveyors
Just as you would when considering any insurance, you should compare a number of policies from different insurers. When looking at policies, you need to consider the following:
- Is the policy tailored to your particular profession (i.e. specifically for surveyors) and does the insurer specialise in your field? If not, the policy may not cover specific circumstances peculiar to your industry.
- What are the extensions and exclusions listed in the policy? Between them, you will be able to see exactly what is and isn’t covered.
- How much excess will you have to pay? This is important, as a reduction of 5 or 10% off the premium may not be worth it, if you have to pay a large excess upon making a claim or claims.
- What is the number of reinstatements of the insured sum? If you have several claims in one year, this can be a vital consideration.
- What is the geographical extent of the coverage? If you provide services outside of Australia, nationwide coverage will not be sufficient.
- What kind of support will you receive when making a claim? Does the insurer provide one-on-one professional advice and a dedicated claims team?
- How much is the policy? If it is more expensive than other policies, does it provide additional value and if it is cheaper, does it provide adequate cover for your needs?The purchaser of any insurance has an obligation to read and understand the terms of cover, so if you are unsure of any clause or in doubt about whether you are adequately covered, make sure you seek professional advice when choosing Professional Indemnity Insurance.
Should surveyors consider public liability cover?
When you purchase your Professional Indemnity Insurance, your insurer will probably ask you if you want public liability insurance as well. If you don’t have it, then say yes, because it is relatively inexpensive and provides vital cover for all businesses who deal with the public.
If you have a business premises where clients visit you or you visit them at their homes or businesses, public liability insurance protects you from any injury or property damage they might suffer as a result of your service to them.
What isn't covered?
Public liability insurance covers your business, any other businesses you own and your employees while they are carrying out their normal duties on your behalf. It does not cover events that arise out of deliberate damage or injury on your part and it only covers those claims made by external third parties (not your own staff). The risks that public liability insurance will not cover are known as ‘perils’ and these will be listed in the policy.
Is it compulsory?
Public liability insurance is not compulsory, but when you consider that public liability claims can often be for millions of dollars, not taking it out as an adjunct to your Professional Indemnity Insurance would be a big gamble for any professional who deals with the public.Back to top
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Frequently asked questions about Professional Indemnity Insurance
Q: Why should I have Professional Indemnity Insurance?
- A: Because if a claim is made against you, you will need legal assistance to defend it, whether the claim is founded or not and you will have to pay for it if you aren’t insured.
Q: What will my Professional Indemnity Insurance cover?
- A: Normal coverage includes your legal defence costs and any resulting damages that are awarded, up to the coverage limits of your policy.
Q: What is the difference between a ‘claims made and notified’ policy and an ‘occurrence’ policy?
- A: A ‘claims made and notified’ policy requires that all claims must be made within the period of insurance, whereas with an ‘occurrence’ policy, a claim can be made at any time subsequent to the period of insurance, providing that the event occurred during the period of insurance.
Q: Why do I need to fill out a proposal form?
- A: Because the insurer will need to know certain information about you and your business in order to calculate your premium, such as the type of business you are in, its size and the types of risks you are likely to need cover for.
Q: What is a costs-inclusive excess and a costs-exclusive excess?
- A: A costs-inclusive excess is where the excess goes towards legal costs and a costs-exclusive excess is where the excess goes towards the claim settlement.
Q: What is run off cover and how long should I take it for?
- A: Run off cover is designed to insure you after you leave your business or move to another business. It covers you for any mistakes you made during the running of your business that result in claims after you leave the business. There may be a statute of limitations on a particular claim, but generally run off cover can be taken for anywhere from 6 to 15 years.
Q: How do I apply for Professional Indemnity Insurance?
- A: The application process is fairly straightforward these days. Usually, you can fill out a form online, provide the necessary information by phone and be covered within 24 hours or so.
Apply for Professional Indemnity Insurance for Surveyors
As a surveyor, you are constantly providing advice to clients, based on detailed research and calculations. But everyone is human and sooner or later there is the potential for an error or omission to be made that results in a client losing money. Don’t wait for it to happen. Take out Professional Indemnity Insurance and enjoy the peace of mind that comes from knowing your assets are protected and you can continue to practise your profession whatever happens in the future.