Town Planners

Town planners (or spatial planners) shape the way towns and cities develop. This involves balancing the competing demands placed on land by housing, business, transport and leisure, and making sure plans meet the economic and social needs of the community. Work can cover a broad area and can include include:

  • planning for housing to create affordable, energy efficient homes
  • managing transport growth and encouraging public transport schemes
  • redesigning street layouts to improve public safety, and reduce traffic and crime
  • developing parks, woodland and waterways in a sustainable way
  • conserving old buildings, archaeological sites and areas of interest
    ruling on planning applications
  • enforcing planning controls, for instance on building that has started without permission
  • hearing concerns about planning proposals from local people and businesses
  • assessing the potential impact that developments, such as new road building, might have

What do insurers look for when issuing terms·

Town Planning is generally seen by insurers to be a low risk activity, however firms who undertake large projects or high value projects should ensure their insurer has a good description of their activities.A lot of Professional Indemnity Insurance for town planning is written on an "Nil underwriting basis" which can result in lower premiums if bought on line or similar, but care should be taken as an insurer will expect their insureds to advise before incepting the policy if any aspect of their work is anything other than generic town planning.

What type of cover will I need?

Member of the Royal Town Planning Institute (RTPI) must hold Professional Indemnity Insurance which is no less comprehensive than the RTPI approved policy.Copies are available from the Royal Town Planning Institute (RTPI). Web site, see link below.

The minimum cover required is as follows:

  • £100,000 for each and every claim if in the preceding year your practice's gross income was less than £40,000; or
  • two and a half times the gross income for each and every claim if it was between £40,000 and £200,000; or
  • £500,000 for each and every claim if more than £200,000.The policy must have a maximum uninsured excess (i.e. the amount the practice has to find from its own pocket for any claim) of:
  • not more than £7,500 if the limit of indemnity is £250,000 or less.
  • not more than 2.5% of the sum insured, or £10,000, whichever is greater, if the limit of indemnity is more than £250,000.Members and practices which carry professional indemnity insurance complying with the requirements of another institutions, such as the RICS, RIBA/ARB or the Law Society, are not required to take out additional insurance. However, members must insure that existing cover complies with the RTPI regulations.

Run off cover

The Royal Town Planning Institute advise members to hold run off cover for a period of six years after they have ceased trading.

Policy Wordings

Professional Indemnity Insurance can be written in a number of ways.There are civil liability wordings and what we refer to a legal wordings.Cover can be offered on an each and every claim or an aggregate basis with the legal defence costs being dealt with in one of two ways, see "The usual cover" below. "The Royal Town Planning Institute requires members to hold cover on an each and every claim basis so care should be taken when purchasing insurance. Town Planners are categorised by insurers as a miscellaneous risk business which is to say they are business's that do not fall into one of the standard 'traditional' professions.

If the town planner also engages in other professional activities a more specific wording might be more appropriate or required it they are required to do so by another professional body.With some professions such as surveying or accountancy the level and standard of cover to be provided is prescribed and insurers must provide cover to a minimum standard to be able to offer insurance to the profession. These professionals governing bodies will only accept insurance from its members from insurers who do not adhere to the standards.

With miscellaneous risks such as Town Planners there is no standard aside from the levels of cover and excess prescribed by the RTPI, so when obtaining terms there is a lot more to consider than just price. The most basic wordings offered by the Lloyd's and insurance markets offer very basic, no frills cover and need many extensions to bring them up-to-date. Read the policy wordings before you buy.

The usual cover

Most miscellaneous wordings offer an indemnity clause limited to claims (including claimants' costs) arising out of any negligent act, error or omission. Many have costs inclusive limits of indemnity that are eroded by the insurer's costs and expenses incurred in the investigation, defence or settlement of claims. Many also have costs inclusive excesses that apply to the insurer's costs and expenses incurred in the investigation, defence or settlement of claims even if there is no third party claim made. A more comprehensive cover would be an any one claim cost in addition policy with the excess not being applied to the costs of defending an action.

The usual exclusions apply typically, miscellaneous policies will exclude things that should have more specific insurance:

  • Bodily injury / property damage, except where caused by a breach of professional duty
  • Vehicles
  • Products liability
  • Contractual liability - this is liability assumed under any express warranty, agreement, guarantee unless such liability would have attached anyway. But take care with agreements such as collateral warranties (see construction professions)
  • Insolvency / bankruptcy of insured
  • Circumstances known at inception
  • Fines and penalties
  • Claims by financially associated parties - some insurers will cover these claims if they emanate from a third party
  • Radioactive contamination and war

The usual extensions

Some insurers will include these extensions as standard others wont

  • Libel & slander
  • Loss of documents
  • Dishonesty of employees
  • Unintentional breach of confidence
  • Infringement of copyright

Presenting your proposal for insurance

The presentation of your business to insurers is very important both in respect of the facts i.e. the things for which cover is required, and the way in which you do your business, both of which influence an insurer's perception of your business and the risk it poses to them.We would always recommend that in addition to the proposal form you are asked to complete, you provide supporting documents with your proposal such as:

  • A CV showing the principals qualifications and experience in the areas of business to be covered
  • Any Terms of Business or terms of engagement you use
  • A copy of your corporate brochure
  • Details of your website

An insurance history listing all material changes to your business since you first had professional indemnity insurance. For example, mention any previous businesses for which you require cover. It is possible you may be asked for a claims history from the previous business or a copy of its last completed proposal form.Don't forget to include the names of any businesses with which you have merged, or any that you have acquired, as these will need historic cover. Likewise you may have ceased to offer certain services for which cover is still required.Keep a written record of all requests for cover to be extended and any historic or material changes to your business.

This information can be updated each year and provided as an addendum to the proposal. Any certification the business may have i.e. accreditation by a governing or standards council, is also well worth disclosing.Keep your presentation neat and tidy. Bear in mind that an untidy presentation may be construed as an untidy business. Allow yourself time to complete the presentation and remember that a hard copy always look better that a faxed one sent in at the last minute.

The Professional Indemnity Insurance market is relatively small so at the point of renewal, concentrate on asking only one or two specialist brokers to quote. Bombarding the market with requests can result in your proposal being locked out of some markets.Renewal is an ideal time to review your insurance requirements. As your business grows and your contract values increase, it is wise to consider what could go wrong and how much it may cost to settle a claim - and also cover the attendant legal costs.

Some policy wordings provide a limit of indemnity with legal costs in addition to the limit. Others provide limits of indemnity which include the legal cost. However, the cost of litigation is high and can eat into the limit of indemnity provided if costs are inclusive.Many professionals are obliged to carry PI by their professional bodies. Many of these bodies not only have specific requirements in respect of policy wording but also on the limits a professional must carry and the excesses they are allowed. Renewal is an opportune time to check your cover both in respect of your own requirements and those of your professional bodies.

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