Professional Indemnity Insurance (PII) in the UK and Republic of Ireland

As outlined in the global RICS Rules of Conduct Appendix A: Professional obligations to RICS, ‘RICS-regulated firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS’.

RICS requires RICS-regulated firms in the UK and Republic of Ireland to meet further detailed PII cover, which meets the minimum terms required by RICS. This page outlines information on those requirements and further detail is provided in the links at the bottom of this page.

The current system for PII is that each member firm is required to purchase a policy, usually on an annual basis, in accordance with the Approved RICS Minimum Policy Wording. PII must be provided by a RICS Listed Insurer. A Listed Insurer is one who has agreed to provide cover in accordance with the Approved RICS PII Requirements and Minimum Policy Wording, has a minimum security rating and who subscribes to the Assigned Risks Pool (ARP), the scheme for members who are unable to get PII in the open market.

2024 Update

Prior to 2024, RICS has not published separate PII Requirements Documents for the UK and of Ireland. However, following RICS’ latest consultation on PII Requirements in UK and Ireland that was undertaken in 2023, separate documents have now been published for each jurisdiction. This is to account for minor differences resulting from the cover that must be offered by insurers, where it interacts with legislation, following Brexit.

The 2023 PII arrangements consultation document can be read in full here and covered proposals to amend three areas of insurance coverage for RICS members in the UK and Ireland:

• Fire safety insurance coverage for buildings above four storeys
• External Wall Assessment (EWS) and Fire Risk Appraisals of External Walls (FRAEW) to provide further cover on a specified basis in the UK.
• Amending cyber-security cover wording in relation to protecting businesses from digital threats, such as data breaches or malicious cyber hacks on a computer system.

Three new insurers have entered the RICS PII market this year: CHAUCER SYNDICATE 1084; Folgate Insurance Company Limited; Tokio Marine Kiln Syndicate 510.

2024 RICS Approved Minimum Policy Wording

The RICS Standards and Regulation Board (SRB) approved updated Minimum Policy Wording for the UK and Ireland respectively, which is in effect from 1 July 2024 and will be applicable until a further review is undertaken by RICS and will be updated in this website page.

The updated Minimum Policy Wording changes to EWS assessments in 2024 (including the signing of EWS1 forms) and FRAEW are applicable to the UK only, primarily as they are based on changes made in legislation and standards in the UK. The position in Ireland will remain unchanged. This difference is reflected in both the respective Minimum Policy Wording and PII Requirements Documents for UK and Ireland (see below).

The changes reflect the amendments that were proposed in the 2023 consultation document with two minor changes. A detailed response and conclusions document is linked below.

Fire Safety Coverage (applicable to both UK and Ireland):

From 1 July 2024, RICS requires listed insurers to provide PII cover for fire safety claims for professional services carried out in respect of buildings 5 storeys and above on the following basis:

• Negligent act, error, or omission (rather than the full civil liability basis);
• Applicable to professional services undertaken on or after 1 July 2024, meaning insurers will not assume liability for historic work before this date; and
• Cover can be in the aggregate, with defence costs included in the limit of indemnity and the with the uninsured excess applicable to defence costs.

While RICS initially consulted on the above proposals for buildings 11 -18 metres in height, following conversations with RICS members and insurers, we consider it reasonable to extend this to buildings over 18 metres. We have also clarified wording around the terms ‘metres’ and ‘storeys’ to ensure clarity.

EWS and FRAEW (applicable to UK only):

RICS has maintained the proposal outlined in the consultation with one amendment. Based on further discussions with insurers, RICS has changed its position on buildings up to 11 metres and consider that there is no justifiable reason to exclude buildings from 11 metres to 18 metres in height. This will require RICS listed insurers to provide cover for EWS, EWS1 Forms and FRAEW for buildings up to 18 metres in height above ground level (including the ground floor, not including the basements or mezzanine levels, whether used for residential, commercial, parking or other use) where work is completed and/or signed off by a person who has completed and passed the RICS External Wall Systems Assessment Training Programme on the following basis:

• Negligent act, error or omission (rather than the full civil liability basis);
• Work completed on or after 1 July 2024 so that insurers are not picking up historic liability, except where they have already chosen to provide such cover over the RICS minimum requirements; and
• Cover can be in the aggregate, with defence costs included in the limit of indemnity and with the uninsured excess applicable to defence costs.