News & opinion

Update on RICS PII response

30 July 2020

The ongoing challenges that regulated firms are facing in the professional indemnity insurance (PII) market, in respect to the availability and affordability of PII continue to be a priority for RICS. We are aware of the crucial role that PII plays in providing important protection for firms and consumers and the need for a sustainable PII market.

Over the coming months, RICS will be taking forward a number of workstreams aimed at supporting the profession, improving market conditions and ensuring the continued availability of adequate and appropriate PII.

Data collection

In order to further our understanding of the current market conditions, including the impact on firms and current exposures, we will shortly be undertaking a request for information for RICS regulated firms.
The data collected will assist in assessing, examining and advocating the changes that need to be made.

A sustainable PII solution

The development of a sustainable PII market is integral to ensuring that regulated firms can continue to get adequate and appropriate PII. We are in the process of exploring a number of innovative solutions and alternatives to the current minimum policy wording. Options that we are considering, include the development of master policies, risk pools and lobbying for Government intervention.
We will be developing these proposals over the coming months and will be consulting with membership, insurers, and other stakeholders.

Support for the profession

RICS recognises the importance of providing support to the regulated firms and professionals during these challenging times.
We are in the process of updating the Risk, Liability and Insurance in Valuation Guidance Note, published in 2018 to cover all surveyors and not just those working in valuation. The guidance is intended to address knowledge gaps about the risk of claims against firms and how to manage and reduce those risks by using fair and enforceable contractual terms to cap or limit liability.

As a new process, RICS is reviewing how it is operating in the market, but the requirement to have a wall system checked by an expert to ensure it is safe will remain a core part of EWS.

PII remains a core component of the EWS process and it is integral that those undertaking EWS work can obtain P. We will be working with insurers and lenders to ensure this.

Advocacy

Over the past 18 months we have be in constant discussions with Ministry of Housing Communities and Local Government, working with them to develop their approach to approved inspector PII and highlighting the significant impact that a breakdown in the PII market would have. We recently met with Lord Greenhalgh, Minister of State, Housing Communities and Local Government to discuss these concerns.

We will continue to press the Government for greater intervention in the PI market and the need to underwrite areas of high risk, such as fire safety exposure, to ensure the continuation of a functioning property and construction market.