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Paper 2 · Lesson 1 — Regulatory Framework, Registration, CPD and Professional Conduct

Keo and agency licensing

KEO eligibility and the one-agency rule, KEO-loss deadlines, agency licensing (ACRA, the moneylender bar, KEO mandatory, PI insurance).

1 questionAnswers & explanations includedFree — no sign-up

Question 1

Horizon reviews the professional indemnity (PI) insurance held across its salespersons and the agency itself.

  1. (i) Every agency and its salespersons must be covered by professional indemnity insurance.
  2. (ii) The insurance protects against claims of professional negligence.
  3. (iii) For a small agency, professional indemnity insurance is optional — a purely commercial decision.
  4. (iv) The minimum indemnity limit required of the agency rises with the agency's size.
  1. A. (i), (ii), (iii) and (iv)
  2. B. (ii) and (iv) only
  3. C. (i) and (iv) only
  4. D. (i), (ii) and (iv) only
Show the answer and full explanation

Answer: D

The rule. Professional indemnity insurance is mandatory for every agency and its salespersons and protects against claims of professional negligence; it is not optional. The minimum indemnity limit required of the agency rises with the agency's size.

Why D is correct. (i) the mandatory cover, (ii) protection against negligence claims, and (iv) the indemnity limit rising with size are correct. (iii) is false — the cover is not optional for a small agency.

The other options.

  • A adds the false (iii), optional cover for a small agency.
  • B drops the mandatory-cover point at (i).
  • C drops the negligence-protection point at (ii).

Exam note. PI cover is compulsory, not commercial; the agency's required indemnity limit scales with its size.

The minimum indemnity limit required of the agency rises with the agency's size →

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