Property professionals PI insurance solutions
For some, the thought that their business is permanently exposed to financial ruin through a simple error or omission is sufficient for them to purchase the cover. For others, it is the recognition that the public have become far more aware of their legal rights, fuelled by escalating court awards and 'no win, no fee' arrangements.
Our NAEA endorsed scheme has been running for more than quarter of a century and is inexpensive security for your business.
Professional indemnity insurance protects agents for claims brought against them from a variety of sources who have suffered proven financial loss, such as clients, corporate entities and lenders.
It is a compulsory requirement of NAEA membership that all principals, partners & directors hold professional indemnity insurance (PI), and purchase into an approved Client Money Protection Scheme (CMPS) if involved in lettings & management.
Cover and benefits
- Civil Liability wording including libel & slander
- Insurers costs in a defence of any claim are in addition to the Limit of Indemnity purchased under the policy
- Breach of professional duty and confidentiality
- Accidental breach of copyright, patent or design rights
- Dishonesty of employees
- Awards made under Estate Agent Ombudsman Scheme
- National Approved Letting Scheme Extension
- The policy Wording meets the requirements of the Mortgage Code
- Our Policy's standard excess is £500 each and every claim (Increasing to £750 for Property Management work) and higher where any Survey and Valuation work for lending is carried out, or dependent on individual circumstances.
- 0% Premium Financing available
- Legal Defence Costs for the Property Mis-descriptions Act
Our scheme arrangement is underwritten by Aviva Insurance Ltd, the UK's largest Insurer.
Professional indemnity policy wording:
Download policy wording (pdf)
Download summary of cover (pdf)
Selecting your limit of liability
When selecting the limit of indemnity, factors to consider include the following:
- the number of claims against property professionals is increasing constantly, given the more litigious environment that exists today
- claimants can consult 'experts' in making their case against you, and you have no control over these often expensive costs. These claimants' expenses will form part of any award made against you and your limit of indemnity will need to be adequate to provide for them
- remember that your policy operates on a 'claims made' basis which means that the policy (and limit of indemnity) in place at the time the claim is first notified and accepted by your insurer will apply to the claim until it is concluded. The policy and cover in place at the time when the work was performed are irrelevant
- claims can take many years from first notification to final settlement and you should ensure that the level of cover you arrange contains some 'future proofing'
Bear in mind also that earning a modest fee does not mean that the resulting legal liability flowing from a breach of professional duty will be equally small. We have dealt with claims running into six figures where the firm's fee was only a matter of a few hundred pounds.
In view of the above, we strongly recommend that all of our clients choose their limits of Indemnity very carefully.
Claims examples
Just look at some of these examples of claims made against Property Professionals:
- It was alleged that an Estate Agent under-sold a property. Five months later it was re-sold at double the previous price.
Insurers settled at £200,000 - An Estate Agent placed a property up for sale, but it was later alleged that no instructions were given by the client.
Insurers settled at £40,000 - A property manager issued a defective rent review notice and as a result of which it was not possible to review the rent.
Insurers settled at £35,000 - A property manager, managing a clients property, replaced clay roof tiles with concrete tiles. As a result of the property being a listed building, planning permission should have been obtained, and this subsequently resulted in the local authority confirming that the tiles must be replaced.
Insurers settled at £20,000 - An Estate Agent valued a clients house and it was subsequently placed on the market. The client anticipated a quick sale on the advice of the Estate Agent, and purchased two properties. However, it later came to light that the house had been over-valued and after a long delay was sold at a lower price than originally anticipated. As a result of this, a claim was successfully brought for loss of bridging finance and other expenses incurred.
Insurers settled at £30,000 - An Estate Agent lent his clients house keys to a potential buyer without carrying out proper checks. The potential buyer was a conman who stripped the house of all its valuables.
Insurance settlement figure not known. - An employee of an Estate Agents firm successfully altered amounts and wordings of cheques, enabling him to obtain the proceeds.
Insurers settled at £50,000
This document is currently unavailable. Please contact a member of the team for more information.
Telephone: 020 7709 1670
Tel: 020 7337 7551
Fax: 0870 191 6758
Email: crm@gilesinsurance.co.uk
