Real estate agents, property managers and strata managers have special risks that other businesses don’t have in advising on and managing property. It’s important to know these to be able to manage the risks, also ensure you have the right insurance to protect you and your business from allegations of negligence.
So what are the key risks and how can your Professional Indemnity Insurance help to protect the financial risk to you and your business?
What is Professional Indemnity Insurance?
This insurance covers you, the agents as well as your business against claims of both actual and alleged negligence when providing advice or an error or omission when acting in your role as a real estate agent, property manager or strata manager. This can relate to breach of privacy, fraud or dishonest conduct of employees, loss of documents or incorrect advice. You may also be responsible under a contract (contractual liability) you have in place with your client.
Professional Indemnity Insurance can pay your legal costs and expenses from experts hired to investigate the issue, whether your found to be negligent or not. The policy will also pay for any damages awarded by a court. This cover applies to civil liability claims, breach of consumer law, personal injury and property damage claims. In addition, the policy will pay for a public relations consultant to help protect your personal and business reputation.
Professional Indemnity Insurance is essential to manage the financial risks related to legal costs, which can be tens of thousands in addition to any damages that may be awarded by the courts, which can be substantial.
What risks are faced by Real Estate Agents, Property Managers and Strata Managers?
Whilst real estate agents, property managers and strata managers have slightly different roles, usual responsibilities include co-ordinating and arranging property maintenance. Estate agents and property managers act on behalf of landlords to ensure that the property is well maintained and safe, whilst strata managers act on behalf of the committee to keep the property and common areas safe. Advice is also provided in respect to sales and rental books.
Professionals have a duty of care to clients; this may be as the agent of the client or as a professional advisor. This advice if acted on, may cause financial loss or if property maintenance is overlooked, people may be injured or property damaged. Examples of these allegations include slipping injuries due to inadequately maintained pest control or injuries due to poorly maintained lighting or handrails along stairways. As a property is usually a client’s largest asset, if anything goes wrong, it’s easy to see how real estate agents, property managers and strata managers can be open to complaints and potentially expensive legal action.
How can Professional Indemnity Insurance help?
Professional Indemnity Insurance can be of benefit to any professional individual, agency or business in the real estate industry. This risk and extent of insurance will depend on the type of business.
Although the industry has standard types of risks, every business is different. The right Professional Indemnity Insurance will provide a comprehensive financial protection, whether you’re a real estate agent, property manager or strata manager. Your policy will pay legal fees whether the allegations are proven or not and any damages, if awarded by the court.
To discuss the right Professional Indemnity Insurance for your business, talk to an insurance professional today.