Section 1
Purpose
Professional Indemnity Insurance (PII) protects an RICS-regulated firm against claims arising from negligent professional acts, errors, or omissions. It is not optional — it is a mandatory requirement under RICS Rule of Conduct 9 for all regulated firms providing surveying services to the public in the United Kingdom.
Understanding the RICS PII requirements is a core APC topic. You must know the minimum limits, the excess rules, and the key policy features that are tested in APC interviews.
Section 2
Key Principles
- The current requirements are set out in RICS Professional indemnity insurance requirements (UK), Version 10, effective 1 July 2024, with a Minimum Policy Wording update effective 1 July 2025.
- RICS Rule of Conduct 9 (Firms) requires that a firm ensures all previous and current professional work is covered by adequate and appropriate indemnity insurance meeting RICS-approved standards.
- PII policies operate on a CLAIMS MADE basis — the policy in force when a claim is made (not when the work was done) is the relevant policy.
- The policy must provide cover on: (a) any one claim or aggregate basis with unlimited round-the-clock reinstatement — except that Fire Safety, Asbestos and Pollution cover may be on an aggregate-only basis; and (b) full civil liability wording as a minimum, except that Fire Safety cover for buildings of 5 storeys and above, and EWS1/FRAEW cover, may be written on a negligent act, error or omission basis.
- Policies must be fully retroactive — covering all past and current work (retroactive date of 'none'). Exception: Fire Safety cover for buildings of 5 storeys and above, and EWS1/FRAEW cover, may carry a retroactive date of 1 July 2024 or later.
- Cover must extend to all past and present partners, directors, members, and employees.
- Policies must be placed with an RICS-listed insurer. The current list is published on the RICS regulation page (rics.org/regulation).
- Fire Safety cover for buildings of 5 storeys and above is mandatory from Listed Insurers for services undertaken on or after 1 July 2024. Cover may be written on a negligent act/error/omission basis, aggregate basis, with Defence Costs included within the limit of indemnity.
- Fire Safety cover for buildings of 4 storeys or lower must remain on full civil liability wording.
- EWS1/FRAEW cover (buildings up to 18 metres) applies where a member has signed off the work under the RICS EWS Assessment Training Programme; the same aggregate/negligent-act basis applies to services from 1 July 2024.
- Defence Costs are payable in addition to the limit of indemnity, except for Asbestos, Pollution and Fire Safety claims (where Defence Costs may be inclusive within the limit).
- Cyber cover is aligned with the International Underwriting Association (IUA) model clause for surveyors' PII.
Run-Off Cover
- When a firm ceases to trade, RICS requires fully retroactive run-off cover to protect clients and third parties.
- For consumer claims: minimum of £1,000,000 in all, for a period of six years from the expiry date of the policy in force at the time of cessation.
- Under the 1 July 2025 Minimum Policy Wording update, consumer run-off attaches automatically for six years once any part of the premium has been paid, including in insolvency. The prior requirement for firms to notify their insurer on cessation (as a condition of run-off attaching) has been removed.
- For non-consumer claims: adequate and appropriate run-off is required, with RICS expecting a minimum of six years from cessation.
- Firms unable to obtain run-off from their incumbent insurer or on the open market may apply to the RICS Run-off Pool.
Section 3
Practical Application
Step 1
At renewal, confirm your firm's turnover for the preceding year and identify the required minimum limit of indemnity from Table 1.
Step 2
Confirm the policy excess does not exceed the maximum permitted under Table 2 for your limit of indemnity.
Step 3
Check the retroactive date and ensure it covers the full period of the firm's trading activity.
Step 4
Confirm the policy is placed with a listed RICS insurer.
Step 5
Retain a current PII certificate on file. Make it available for inclusion in EOI/fee proposals and upon client request.
Step 6
Notify your insurer promptly of any circumstances that might give rise to a claim — do not wait for a formal claim to be made.
Step 7
Ensure your firm's CHP is in place and communicated to the client at appointment stage. A well-evidenced CHP record can support your position in any subsequent PII claim. See GN-PA-06 (Section 3a).
Section 4
Common Mistakes to Avoid
- Holding PII at the minimum limit when the firm's project values significantly exceed those thresholds — consider higher limits.
- Having an excess that exceeds the RICS maximum permitted level — this is a Rules of Conduct breach.
- Failing to notify insurers of potential claims promptly (on a claims-made policy, late notification can prejudice cover).
- Not obtaining run-off cover when a firm ceases to trade.
- Providing the wrong PII figure in appointment documentation or EOI submissions.
- Not having a CHP in place — this is a separate regulatory breach under Rule of Conduct 7 and is regularly identified by RICS regulatory visits. The absence of a CHP can also complicate the management of a PII claim.
Section 5
APC Competency & Quick Reference
This topic is relevant to: Business Management (Level 1–2), RICS Rules of Conduct, Risk Management.
What is the minimum limit of indemnity for an RICS-regulated firm with a turnover of £350,000?
The minimum limit of indemnity is £1,000,000. Under RICS PII Requirements Version 7 (effective 1 May 2020), firms with turnover of £200,001 and above must hold a minimum limit of £1,000,000. The firm should consider whether this is adequate for the scale of its commissions.
What is the maximum uninsured excess for a firm with a £1,000,000 limit of indemnity?
The maximum uninsured excess is 2.5% of the sum insured. For a £1,000,000 limit, this equates to £25,000. For limits up to and including £500,000, the maximum excess is the greater of 2.5% of the sum insured or £10,000.
PII operates on a claims made basis — what does this mean in practice?
It means the policy in force when a claim is made is the relevant policy — not the policy when the work was carried out. This is why continuous cover (including run-off cover after cessation) and prompt notification of circumstances are essential.
What run-off cover is required when an RICS firm ceases to trade?
For consumer claims: a minimum of £1,000,000 in all for six years from cessation. For non-consumer claims: adequate and appropriate run-off, with RICS expecting a minimum of six years. Firms unable to obtain run-off may apply to the RICS Run-off Pool.
What is the relationship between PII and the firm's Complaints Handling Procedure?
Both are mandatory regulatory requirements. A complaint and a PII claim can arise from the same event. A documented CHP showing a professional and timely response to a complaint can support the firm's position if the matter escalates into a formal claim. The absence of a CHP is a separate Rules of Conduct breach under Rule 7.
Section 6
Pre-Appointment Checklist
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PII policy confirmed as placed with a listed RICS insurer
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Minimum limit of indemnity confirmed against current turnover (Table 1)
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Policy excess confirmed as within RICS maximum permitted level (Table 2)
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Retroactive date confirmed as covering full trading period
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Current PII certificate obtained and filed
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PII certificate attached to or referenced in fee proposals and appointment
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Insurer notification procedure understood for potential claims
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Run-off cover arrangements understood and documented
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CHP in place, meets RICS minimum standard, and communicated to client at appointment stage
Section 7
CPD Learning Outcomes
- State the RICS minimum limits of indemnity and maximum uninsured excess requirements from the RICS PII Requirements Version 10 (1 July 2024).
- Explain the claims-made basis of PII and its implications for run-off cover and notification obligations.
- Describe the relationship between PII and the firm's CHP, and why both must be in place before commencing services.
Section 8
Further Reading
- RICS Professional indemnity insurance requirements (UK), Version 10 (effective 1 July 2024), as amended by the Minimum Policy Wording update (effective 1 July 2025)
- RICS Risk, Liability and Insurance Guidance Note (1st edition, April 2021)
- RICS Standard Form of Consultant's Appointment Explanatory Notes (May 2022) — Section 4.34
- RICS Standard Form of Consultant's Appointment — Clause 12 (Insurance)
- RICS Rules of Conduct (effective 2 February 2022, as amended) — Rule 9 (PII) and Rule 7 (CHP)
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