Why do estate agents need insurance?
A viewing mishap
Taking customers to viewings is a core part of your work, but it always involves a degree of risk. If someone hits their head on a low staircase or a new build fixture falls on them, they could attempt to make a claim against an estate agent’s business – fortunately, insurance can help. With public liability cover, we’ll assist with your defence costs and any compensation settlements made against you, so you can get on with the day-to-day.
Unhappy clients
You work hard to keep vendors happy, but complaints can sometimes come with working as an estate agent. Someone might feel you undervalued their property and sue for their losses, or a landlord could allege you failed to conduct appropriate tenant checks. Not every deal goes smoothly, so if a customer feels they’ve received bad advice, they may bring a claim against your letting business. Even if their allegations are incorrect, your professional indemnity insurance can help with legal fees.
Property problems
If your estate agency offices are damaged by fire, flood or burglary, you might find it difficult to continue business as usual. Without the necessary equipment to complete contracts, perform credit checks, list properties or schedule appointments, everything could stop. Tailoring your estate agents’ insurance to include commercial buildings insurance means investigations and repairs to the bricks and mortar can happen swiftly and you’ll be assisted with the cost. Plus, contents insurance helps to repair or replace what’s inside your office so you can be back to normal as soon as possible.
What insurance is available for estate and letting agents?
Professional indemnity insurance
For estate agents, professional indemnity insurance can be helpful since service-based work brings room for allegations of mistakes and bad advice. It’s often required by client money protection schemes (external link). If your agent lists the incorrect room dimensions and prices accordingly, your client may feel they've lost out on rental income. If a contract falls through because of a mistake in your advice and causes financial loss to a client, professional indemnity insurance can help cover the cost of defending a claim.
Employers’ liability insurance
Employers’ liability insurance can protect real estate businesses which employ staff. When estate agents work for you, this brings a responsibility to look after their welfare while they are going about your business. If someone faces an accident while they’re measuring a loft or trips over a loose cable in your office, there’s a chance they could claim damages. This type of insurance is, in most cases, a legal requirement for UK businesses (external link) which employ staff.
Cyber and data insurance
You handle and store sensitive client data belonging to renters and property owners alike. If this is stolen, mislaid, or even targeted in a deliberate cyber attack, names, addresses and financial details could all be under threat. In the event of such circumstances, the affected parties may well decide to claim against your estate agency. Cyber insurance from Hiscox covers the cost of defending claims related to data breaches and helps your estate agency with losses to minimise the impact.
Every estate agent’s business is unique, so you may also like to add public liability insurance, personal accident cover, office insurance or portable equipment protection. If you’re in a leadership position, you might consider directors’ and officers’ insurance too.
Insurance for estate and letting agents: FAQs
How much professional indemnity insurance do I need?
Estate agents often find they’ll need enough insurance cover for the costliest potential lawsuit. If you’re a member of an association such as ARLA Propertymark or the NAEA, which now sit under a single brand, then there are also minimum professional indemnity cover (external link) limits to be aware of.
If you don’t let or manage properties, then the minimum limit of indemnity for estate agents who are association members is £100,000 – but this rises to £150,000 for those who do administer property lets. If your business lets or manages properties and has an annual fee income above £150,000, then again this rises to £500,000 for members of ARLA Propertymark.
What’s the difference between professional indemnity and public liability?
Professional indemnity insurance relates to service-based complaints, while public liability insurance helps if someone faces an injury or property damage as they interact with your business. PI steps in if the complaint or allegation comes from a client and is related to work you provided, while public liability insurance can cover you if someone files for compensation for injury or property damage.
Both insurance types can be beneficial for estate agents who need to defend their business from compensation claims. Learn more about the difference between professional indemnity and public liability insurance.
What insurance do I need for working from home?
Professional indemnity insurance could still be beneficial for estate agents who work from home since the nature of your work is still service-based and you’ll be making pricing judgements. Even from a home office, employers’ liability insurance is usually a legal requirement for companies with staff.
Some types of cover, such as cyber insurance, might even become more important while you’re working remotely, since your colleagues will be uploading property listings and emailing vendors via home networks. They might not have secure IT systems like you would in the office. Read about home-based business insurance to find appropriate cover options.
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What is professional negligence?
Failing at an aspect of your job can be disappointing, but did you know it can give cause for legal action? Learn the definition of professional negligence for more.