Thursday 8th August
RICS increases surveyor insurance requirements
Kerry London’s Professional Indemnity Insurance experts outline changes by the Royal Institute of Chartered Surveyors (RICS) to increase the minimum level of professional indemnity insurance (PII) for its surveyor members. The new rules came about following a consultation last year that sought to address the insurance concerns of its 130,000 members working across the real estate, construction, and infrastructure sectors. The new rules apply in the UK and Ireland and took effect on 1st July.
What’s changed?
The RICS consultation highlighted several tasks as core surveying services, essential to a surveyor’s role and requiring an increased level of insurance. Prior to these changes, some cover wasn’t available. Changing legislation (particularly around fire risks) also influenced the RICS decision to increase the minimum level of insurance needed by surveyors. RICS worked with its panel of insurers to ensure that PI insurance is available for its members. Several new insurers have joined the RICS PII panel, which helps ensure minimise price increases and coverage for a broader range of risks.
All changes took effect on 1 July, so surveyors need to discuss their PII cover with their insurance broker as soon as possible to ensure compliance with the new rules. Kerry London’s Professional Indemnity Insurance team specialise in construction and real estate PII and can arrange insurance that meets the latest RICS requirements.
External Wall Assessments (EWS) and Fire Risk Appraisals of External Walls (FRAEW)
Insurance cover (UK only) is now required for EWS1s and FRAEWs work on buildings up to 18 metres, and work signed off by RICS members qualified in their External Wall Systems Assessment Training Programme for the following:
- Negligent act, error, or omission (not full civil liability basis)
- Applicable to professional services undertaken on or after 1 July 2024
- Cover can be in the aggregate, with defence costs included in the limit of indemnity
- The uninsured excess may apply to defence costs
The new rules apply only to the UK because they reflect changes made to UK legislation and standards over the last few years. Cover requirements in Ireland remain unchanged.
Fire Safety Coverage (applicable to both the UK and Ireland)
PII cover is now needed for professional services carried out on high-rise buildings five storeys and above in height. RICS requires surveyors to extend their PI insurance to cover work done on buildings over 18 metres – high-rise buildings. Surveyors can now access cover for negligent acts, errors, or omissions (rather than the total civil liability basis).
Cover may be offered on an aggregate basis and include legal defence costs (the uninsured excess may apply to defence costs), which means all claims are covered up to the full limit of the insurance policy during the period of insurance. Any claims exceeding that limit must be paid by the insured.
Cyber Insurance
RICS has removed its own cyber exclusion clause developed in 2021 that was designed to enhance PII cyber insurance from the minimum terms to meet the Prudential Regulation Authority (PRA) requirements. This change provided greater protection for RICS members
The most recent 2024 changes to PII cyber insurance mean the RICS insurers provide the same level of PII cyber insurance for all members (using the International Underwriting Association’s model clause IUA 04 017 Professional Indemnity Cyber and Data Protection Law Endorsements). This means that all RICS surveyors get a consistent level of PII cyber insurance, that covers the risks they face.
Wider protection for surveyors
The new RICS PII requirements offer better insurance protection for future fire safety risks and provides greater reassurance for surveyor members.
Share this story
We’re here to help
Get in touch with the team for expert advice
Kerry London is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent and Lloyd’s accredited broker, which means that we work with a wide range of niche and major insurers.
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note, we have relied on information sourced from third parties, and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law.
Categories: Professional Indemnity,
