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PII in the UK

PII in the UK

In our guide, Professional Indemnity Insurance in the UK, you can find how your firm is likely to be able to demonstrate that they meet the requirements of rule 9 of the Rules of Conduct for Firms.

2021 RICS Approved Minimum Wording

We have made the following changes to the RICS Approved Minimum Wording for 2021 and the terms to which insurers agree to write.

These changes came into effect on 1st April 2021.

Fire safety cover

Since 2020, insurers have imposed a blanket fire safety exclusion on PII terms provided due to concern following high profile fire safety failures, meaning chartered surveying firms have increasingly been left uninsured for fire safety exposure on all aspects of their business.

Under the new terms, insurers are not permitted without specific dispensation to exclude fire safety claims on a property four storeys or less and fire safety coverage must be provided as a minimum on an aggregate, defence cost inclusive basis.

This aspect of the changes will come into effect on 1 May 2021. 

Cyber cover

There is a new regulatory requirement for insurers to clarify the cyber cover provided in PII policies. The changes do not restrict the cover provided in PII policies, but clarifies existing requirements on insurers from their regulator the Prudential Regulatory Authority.

Approved Insurers

A new insurer has joined the list of RICS Approved Insurers, providing a greater competition and increasing the availability of cover.

Assigned Risks Pool

To ensure the availability of PII, the RICS has a market facility, the Assigned Risks Pool (ARP). If you are unable to obtain PII on the open market or would like further information on the ARP, please click here.

Retirement

If you're a member who has retired or ceased trading, We require you to maintain professional indemnity insurance (PII) ‘run-off’ cover.
Traditionally this insurance is cheaper than ongoing insurance, subject to market conditions, with the premiums usually reducing over the period of time since the member ceased to practice.
The run-off requirement of RICS requires partners (including members of limited liability partnerships) and directors of a firm to ensure run-off is maintained for ex-partners, directors, consultants and employees. The need for run-off insurance arises because PII is underwritten on a ‘claims made’ basis.
Claims can arise at any time up to 15 years after the work was undertaken by the member. Members should make certain that their executors are made aware of this in order that they can ensure adequate provision after the death of the member.

Liability dissipates with time and insurance brokers can advise on whether there is the necessity to maintain run-off for the full 15 years, but, as a minimum you will need to comply with the run-off requirement in our PII Policy sheet below.

In 2019 we made changes to our run-off requirements, clarifying ‘adequate and appropriate’ to mean a minimum of six years for consumer claims. Insurers will provide a £1,000,000 aggregate limit for consumer claims automatically in the minimum wording. Firms can obtain run-off for longer periods, or with higher cover levels, if they deem it ‘adequate and appropriate’.
Firms are still required to take out "adequate and appropriate" cover for commercial claims, which we would normally expect to cover six years after closure.

Find out more about regulation