17 JUL 2019
RICS is aware that firms are facing a challenging Professional Indemnity Insurance (PII) market – with limited coverage and increased premiums.
This hardening of the market is in part due to a review by Lloyds, which raised concerns over insurers' exposure to PII. RICS is monitoring this situation closely and is proactively engaging with relevant stakeholders to ensure continued provision of a viable PII market for the profession.
Please ensure that you contact your broker well in advance of your PII renewal date to ensure that there is time to undertake a full market exercise. If you are unable to get cover, please contact RICS at the earliest opportunity.
We are particularly conscious of PII availability for Approved Inspectors, who work to certify buildings under the Building Act 1984, where coverage in the market has become very limited. This is due to insurer concerns over exposure to cladding claims, and related fire safety notifications.
The Ministry of Housing, Communities and Local Government (MHCLG) has set specific requirements around PII for Approved Inspectors. Due to these specific requirements, and MHCLG unwillingness to react to the hardening insurance market, Approved Inspectors are increasingly unable to find compliant cover, removing their ability to trade. This has implications for the continuation of thousands of construction projects around the UK as well as national housing targets, and has been reported in the national press.
RICS is also aware that other built environment professionals, including both RICS members and members of other professional bodies, are experiencing pressure from insurers to cap or exclude claims emanating from fire safety issues.
RICS has taken action to amend its policy wording in order to ensure adequate and appropriate cover is available in the market for those professionals and we are monitoring the impacts of this action over the coming weeks. We are also engaging with other professions and MHCLG in order to find a sustainable route forward.