Professional Indemnity Insurance For Estate Agents
Working in the property market is fast paced. Whether you operate as an independent estate agent or in a larger business offering residential and commercial services, your reputation is a key part of winning a client so it’s important to have the right estate agent insurance.
It’s vital that the nature of your job doesn’t risk damaging your standing with customers. Working with a wide array of property owners and buildings can mean mistakes happen. This could be something as innocuous as misplacing crucial documents or something more serious such as inadequately handling a sale.
Incidents like this can have a catastrophic impact on your business as well as your reputation. This may be the case even if an error occurred without malicious intent. The resulting claim can leave you with severe legal and financial ramifications as well as damage your reputation.
While professional indemnity insurance for estate agents isn’t a legal requirement, it is recommended for property professionals. Not only does this type of cover protect from the risks associated with offering your services to customers, but is also a prerequisite for entry into property associations including NAEA (National Association of Estate Agents).
At Heath Crawford, we can assist you in obtaining the correct level of protection in the event of a professional indemnity claim against you. Our expert brokers can even create a unified business insurance policy to cover all aspects of protection for your company.
Protect your business with additional cover
A professional indemnity policy is just one type of protection that is crucial for an estate agent. When running a property business there are multiple areas of insurance that we would also consider crucial. Housing these with different providers can make understanding your cover and claiming challenging.
That’s why we often advise creating a unified insurance solution. With coverage in one place you gain the advantage of having one policy, one renewal date and a simple streamlined process in the event of a claim.
When considering the types of cover, and amount of protection needed, this will depend on your situation. Every business is unique, as such your insurance cover should be as well. However when it comes to estate and letting agents we would recommend the following types of insurance in addition to professional indemnity insurance:
Employers liability insurance
If you run an estate or letting agents then you will likely have employees, in which case you will require employers liability insurance. Cover is needed regardless of their status as full time, part time or contractors. As a legal requirement in the UK your insurance cover will need to include this.
Employers liability can cover a range of scenarios in which a staff member becomes ill or injured as a result of working for you. For example a letting agent slipping on a wet floor while at a property viewing. Such scenarios can lead to claims against you, potentially resulting in legal and settlement fees.
This form of cover is only necessary if you have an employed team within your business, even if they only work remotely. If you operate as a self-employed estate agent then it’s not compulsory cover. If in doubt, discuss your situation with our broker team and we can support you in getting the correct tailored solution for your business.
Public liability insurance
As an estate or letting agent you will spend plenty of time in client properties. In the event that you accidentally cause damage, public liability can assist in covering for the costs associated to fix this. This element of the cover is also called Third Party Property Damage.
The other aspect of protection that public liability adds is protection for people visiting your premises, also called Third Party Bodily Injury. If you plan to have clients, or any members of the public, visit your office then this cover is essential. A simple slip and fall can result in a sizable claim from a visitor, as such the amount of cover included is important to consider.
Housing your business at an office means that in the event of an accident, such as fire or flooding damage, that you have nowhere to operate in the meantime. This type of business insurance can assist in repairing any damage, from a broken window to a rebuild of your building if you own your office outright. You can find out more about office insurance, here.
Business contents insurance
If operating your estate agents from an office building then covering your essential equipment is something we highly recommended. This type of cover can protect items that are accidentally lost, damaged or stolen.
Business contents insurance is a must if you have furniture, computers, phones and other equipment. Operating as an estate agent you may have multiple PCs that employees require for their job, an incident that means they can no longer be used can result in a sizable replacement bill without protection.
Business contents may also include:
- Covers for personal items belonging to employees or visitors
- Covers for promotional merchandise
- Replacement of broken glass
Business interruption insurance
Also known as business income insurance, business interruption insurance covers your business against revenue loss as a result of a fire, flood, theft or act of vandalism. At its simplest it accounts for the loss of income you experience when you’re unable to trade, business interruption can assist in paying invoices and employee wages during that time.
We often find this to be an area clients don’t integrate into their protection, largely because of the misconception that it’s included in other policies. If your buildings insurance covers the cost of repairing a damaged office it will only do that, any lost revenue while you are closed during this time will be covered under your business interruption policy.
Technology is at the centre of many industries now, and estate agents are one of many companies that underestimate the impact that a data breach or hacking issues can present to them. With the correct cyber insurance coverage, your company can operate with the knowledge that incidents are protected.
A comprehensive cyber policy will provide cover for first party and third party claims.
Third party cover is when a customer brings a claim against you for the loss of their data.
First party losses provide cover for you to proactively inform a client that you’ve been subject to a data breach and the policy will provide cover for all associated costs.
Social Engineering cover and e-crime is another important level of cover to consider and can offer assurances where you may experience business downtime as a result of a hack, as well as support when you experience online extortion or ransomware demands that require a payment to the hacker.
Cyber liability insurance covers the cost for the online protection of all business sizes, from self-employed to employers with a larger team of specialist consultants.
Frequently Asked Questions
Why do estate agents need professional indemnity insurance?
There is plenty of margin for error when working as an estate agent, and working with a wide range of clients can add to the risk of a mistake being made. Depending on the resulting effect a claim can be large, even when an error was not intentional.
Some of the most common grounds for a professional indemnity claim against an estate agent include:
- Underselling a property
- Overvaluation of a property
- Giving sub-standard advice on how best to sell a property
- Failing to manage the property sale and purchase correctly
How much will my insurance policy cost?
The annual policy can vary greatly based on a number of factors. These can include:
- The size of your company
- The location you primarily operate in
- The balance of residential and commercial properties
- Any previous history of claims
The total premium will also naturally be based on the types of cover you chose to integrate into your estate agents policy.
We can work with you to ensure you get the balance right between the extent of cover and the premium cost. That way you get the protection your business needs in place for the correct price.
My company operates remotely, how does this affect the cover I need?
Every business is unique, and a fully remote estate agent will have its own unique set of requirements for insurance. It’s best to consult with us before you discount any element of cover, by understanding your business we can help adapt the policies and their limits to what you need. You can read more about the types of insurance a company would need when working from home, here.
Is any activity not covered by professional indemnity insurance for estate agents?
PI insurance is designed to cover for a specific type of risk, where your professional advice or service causes financial loss for a client. As such you certainly shouldn’t consider professional indemnity to be a coverall, you will require multiple types of cover to be adequately protected from the majority of claims.
For example if you were to damage a client’s property during a viewing then you would need public liability cover to account for this.
Is the extent of cover different if I’m a letting agent?
No, generally the risks that both estate and letting agents are exposed to are similar and as such the types of cover needed are similar. That being said, the level of insurance required is variable to your business, and the limits on your policies is something we can discuss with you.
Balancing the maximum level of cover and your premium cost can be a lot to manage, so having an experienced broker on your side to help you obtain adequate cover is a great help.
What professional bodies recommend professional indemnity insurance for estate agents?
While all UK property associations recommend professional indemnity cover for their members, some go one further and make this compulsory for entry. Some professional bodies that recommend or require professional indemnity insurance for estate agents include:
- National Association of Estate Agents (NAEA)
- NAEA Commercial
- National Association of Valuers and Auctioneers
- Association of Professional Inventory Providers
- Association of International Property Professionals
- Association of Residential Letting Agents
- Association of Residential Managing Agents
As well as being compulsory, those that require professional indemnity insurance often have a minimum level cover as well. For example, the NAEA requires a minimum limit of £100,000 for PI insurance compensation. We can take these requirements into account when acquiring your cover.
If you’re interested in Estate Agents Professional Indemnity Insurance, please fill in the form below with your contact details and we’ll get back to you as soon as we can.