Government action needed on professional indemnity insurance

The onset of COVID-19 has exacerbated the lack of availability of professional indemnity insurance (PII) and will impede the recovery of small and medium sized enterprises once health and economic measures have been lifted. RICS has written to Government to highlight the issues and call for its support to ensure a properly functioning market in the future.

The market for PII has increasingly hardened in recent years. A 2018 Lloyd’s of London review found that two thirds of syndicates offering PII were effectively loss making. This review, alongside increased economic uncertainty due to Brexit and now COVID-19, has led to a decrease in availability and affordability of PII. This has led to some businesses having to cease trading.

We believe that the lack of affordable and available PII is one of the biggest challenges facing small and medium sized surveying firms at present, and needs resolving in order to support the long-term sustainability of the profession and their role in a well-functioning property industry.

RICS has taken steps to increase availability and is working closely with the individual departments within Ministry for Housing, Communities and Local Government on these issues.  However, a resolution to this issue will ultimately require support from across Government departments (in particular, HM Treasury and the Department for Business, Energy and Industrial Strategy) and should be considered holistically alongside other professional services, which are similarly affected. We have therefore written to Government calling for their support in developing a sustainable PII offering.