Buying and selling houses is stressful and involves life-changing sums of money. That means professional indemnity for estate agents is a must, as customers can claim compensation if they believe the advice given has cost them financially.
“Invest in property,” is something we have all heard at some point. The value of houses seems to rise each month, even when other aspects of the economy are struggling. However, buying, selling or letting a home is a complicated business. There is a limit to how much research people can complete online. Sometimes you need an expert on the ground.
That’s where you – the estate agent – become essential. You know the area. You have probably followed prices and trends for years, maybe decades. Letting agents are the same. The cost of renting can be high, and getting the right lease on the right terms can be tricky.
Why Should Estate Agents Have Professional Indemnity Insurance?
Giving reliable advice to people when they are buying or letting a home is what reputations are built on. Customers trust your opinion. It’s a very subjective business though, and the margin for error can be substantial when you are dealing with bricks and mortar potentially worth hundreds of thousands of pounds.
The increasing regulation of the property businesses makes it difficult for anyone to understand. The expertise from a trusted estate agent is vital to help people make major decisions about where they work and live.
Most professional bodies for people involved in the property industry require their members to have adequate professional indemnity cover in place. This includes organisations like the National Association of Estate Agents (NAEA), the National Approved Letting Scheme (NALS), and also the Association of Residential Letting Agents (ARLA).
Professional indemnity insurance helps protect you if a client claims there’s a problem with the work you have done on their behalf looking for and completing legal documentation on. Claims can relate to many aspects of advice, such as:
· Negligence, negligent mis-statement, negligent mis-representation or breach of duty of care.
· Dishonesty of partners, directors, employees or self-employed working with you.
· Defamation of or infringement of intellectual property rights including copyright and trademarks.
Professional indemnity for estate agents can cover the costs if you have to pay some form of compensation to correct a mistake made when giving advice about a property. It can also help to cover legal defence costs.
You won’t know that you need professional indemnity insurance until you need it. Then it could be too late. That’s why estate and lettings agents need it in place before they start acting on behalf of clients who are looking to buy or rent properties.