2025 RICS Minimum PI Terms & Conditions Changes

From 1 July 2025, the Royal Institution of Chartered Surveyors (RICS) has implemented a series of updates to its Professional Indemnity Insurance (PII) Requirements and associated Approved Minimum Wording ^[1]. These changes follow a public consultation earlier this year and are designed to reflect evolving risks, improve clarity, and enhance consumer protection.

As a PII broker working closely with RICS-regulated firms, we believe it’s essential to bring our clients up to speed, not just on what’s changed, but what it means in practice.

Key Changes to the RICS Minimum Terms

1. Policy Cancellation Protocols

Insurers and members now face clearer rules around the cancellation of PI policies. This includes stricter notification requirements to RICS, ensuring that any lapse in cover is reported within agreed timescales.

The new cancellation provisions are included within Section D General Conditions Clause 11.

2. Fire Safety Coverage

Insurers  continue to provide cover for fire safety related claims on buildings five storeys or higher, but only for negligence-based claims. However, such claims continue to be subject to a retroactive date of 1^st July 2024, meaning that claims arising from professional service performed prior to this date will not be covered under the Approved Minimum Wording.

Furthermore, as of 1 July 2025, the definition of fire safety has been expanded to include internal elements of a building, not just external cladding or façades or other elements that make up the external wall system.

What This Means in Practice

Under the RICS 2024 PI Policy Wording, an attempt was made to narrow the definition of fire safety claims and in doing so, focussed on the external wall systems (EWS) and components of buildings. However, the updated wording now explicitly brings internal fire safety elements back into scope. This could include:

• Internal fire-stopping measures (e.g. cavity barriers, fire collars, sprinklers)
• Compartmentation and passive fire protection
• Fire doors and internal escape routes
• Fire detection and alarm systems

This change reflects a broader understanding of fire risk and is said to align with the Building Safety Act 2022, which places greater emphasis on holistic building safety, not just external cladding.

It is important to note that, under the prior RICS Minimum Policy (2024) the restrictions around fire safety only applied to the external cladding systems, balconies, or external wall systems (including any insulation and/or fire breaks which form part of the wall system) of any building. Cover for internal fire safety matters was unrestricted but will now fall within the restricted cover under the Approved Minimum Wording.

Why This Matters for Insured Firms

• Greater potential for uninsured exposure: Surveyors, valuers, and consultants may now find themselves exposed to certain claims previously covered, related to internal fire safety advice or omissions.
• Training and competence: Firms must ensure that staff involved in fire safety assessments are appropriately trained and competent, particularly when advising on internal systems. Not all insurers may apply the new definition where appropriate risk management processes are in place and can be evidenced.
• Terms of engagement: Firms may wish to consider amending their terms of engagement, reflecting the potential changes to their PII. For example, including specific caps on liability and/or exclusions of liability, relating to the specific risk.

We would highlight that this is in respect of the Approved Minimum Wording, which is the minimum level of insurance that firms should be offered and should maintain. On a case-by-case basis greater levels of cover and/or broader fire safety cover may be available, which should be discussed with your insurance broker. It’s important to review your policy wording to identify whether internal fire safety risks are adequately covered.

3. External Wall Systems (EWS)

Subject more fully to the terms and conditions contained in the RICS Minimum PI Wording, cover for EWS-related work, including EWS1 forms and Fire Risk Appraisals of External Walls (FRAEW), remains for buildings up to 18 metres, provided the work is carried out by individuals who have completed RICS-approved training.

4. Consumer Run-Off Cover

The updated 2025 RICS Wording confirms that six years of consumer run-off cover must be provided where payment (or part payment) of the premium has been made.

This intends to ensure that clients and consumers remain protected even after a firm ceases trading, provided the appropriate premium has been paid. It also reinforces the obligation on insurers to honour this cover without ambiguity, aligning with broader consumer protection principles.

It is important to keep in mind however, that this extension intends to provide cover for up to £1,000,000 in the aggregate, for the six year period. It is not an annually renewable indemnity limit and therefore, firms should ensure that they remain to purchase adequate and appropriate run-off cover for an increased amount where required, and particularly so in respect of any liabilities for commercial based work i.e. business to business (non-consumer).

Why This Matters

• For firms: The update provides greater clarity around legacy liabilities. It also ensures that firms can make cessation plans responsibly, knowing their clients remain protected.
• For clients: Consumers can be confident that they have recourse for up to six years after a firm has closed (subject to availability of the aggregate limit), should a claim arise from past professional work.

The updated 2025 Approved Minimum wording specifically contains a clause introduced by the Insurance Underwriting Authority, being the IUA 04-17. This clause acts as an exclusion of Cyber and Data Protection type losses. This is a broad exclusion and one which should be carefully considered as firms become more digitised and vulnerable to these threats.  

Previously, the RICS Approved Minimum Wording provided a degree of such cover, which some firms chose to rely upon. In light of the full exclusion, firms should be seriously considering their potential cyber exposure and if not already maintaining a policy, thought should be given to this.

Our Role as Your Broker

We don’t believe in a one-size-fits-all approach. Our role is to provide well-reasoned advice, tailored to your firm’s specific risk profile. Whether it’s benchmarking your current programme, identifying gaps in cover, or helping you navigate these new RICS requirements, we’re here to act as an extension of your team.

If you’d like to explore how these changes affect your current PI programme, or whether your policy is still fit for purpose, we’d be happy to arrange a confidential review. Please get in touch with the team at [email protected].

[1] www.rics.org/regulation/regulatory-compliance/professional-indemnity/pii-in-the-uk