Why do estate agents need insurance?
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.
Related articles and guides
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Negotiation is a skill every estate agent needs. Discover our helpful advice on how to negotiate with different personalities.
Cyber attacks: A guide for small businesses
Even the smallest of businesses can face big losses from cybercrime. Read our small business guide to cyber attacks to understand the risk.
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.