What is estate agent insurance?
Estate agent insurance isn’t a single product. It’s a combination of covers that meet the insurance needs of your estate agency business.
Professional indemnity is usually required to operate as an estate agent in the UK. Assuming you meet clients face-to-face, you will also need public liability. Commercial legal expenses insurance is valuable, so we include it as standard.
Why do estate agents need insurance?
Estate agents are exposed to many risks inherent in their profession. They deal with and have responsibility for valuable properties. They have a lot of contact with members of the public. They provide advice on deals that involve large amounts of money.
And then there is the estate agency itself with all its assets, offices, employees, websites, lots of electronic data and regulatory obligations.
Industry regulation compliance
While not directly required by law, you will find that professional indemnity insurance for real estate agents is a must-have cover if you wish to operate in the UK property market.
Giving the wrong advice
Professional advice can go wrong, and since large amounts of money are changing hands, you’ll want to have proper legal protection in place.
Damage to property and injury
There are all kinds of pitfalls when showing other people’s homes. Picture yourself opening the door, and a dog escapes onto the road; it causes an accident or injurs someone. Who would be at fault?
Not making ends meet due to illness
No doubt your business relies on your income. Would you have enough reserves to afford monthly outgoings if you fell seriously ill?
Professional indemnity insurance for estate agents
As an estate agent, you advise clients on what they should do with their properties and provide certain services to help them secure a sale or a tenant. Bringing a deal about that pleases the property owner and represents a good value for the buyer or tenant is always a challenge, especially in changing market conditions.
If one of the parties in the chain perceives that your actions led to their financial loss, you may get caught in a legal dispute.
This is why professional indemnity insurance is an essential cover for estate agents. It will provide a legal defence if your client accuses you of a costly professional error. The cover will also pay compensation if due.
In addition, UK estate agents must be members of an authorised redress scheme, and your membership must be made clear to your customers. Redress schemes require estate agencies to hold professional indemnity insurance.
What does professional indemnity insurance for estate agents cover?
Professional indemnity is usually a requirement for estate agents but also an instrumental cover for any business providing professional services to its customers.
You can generally resolve disputes with clients without going to court. However, the legal fees to deal with legal threats can still be significant. Everybody has heard of injury lawyers, but solicitor firms specialising in legal claims against estate agents also exist. These companies actively encourage unhappy clients to initiate a case against their estate agency.
Professional indemnity protects estate agents from claims or accusations of wrongdoing from their professional advice or work product.
Cover includes:
- Failing your duty of care
- Making a mistake
- Acting negligently
- Giving the wrong advice or recommendation
For example a compensation claim has been initiated against you because:
- You failed to make a buyer aware of a defect in a property that you were aware of, and they seek compensation after buying the property
- You shared a client's confidential information with an unauthorised party
- Your client accuses of underselling their property
- You are accused of underhand tactics
Choosing an estate agent professional indemnity limit that’s right
Selecting an appropriate professional indemnity limit for your estate agent business is not always obvious; consider the following:
- The property ombudsman and the scheme of which your agency is a member will have specific professional indemnity insurance requirements.
- The more significant your business is and the greater the number of clients, the higher the claim risk. Remember that sometimes, more than one claim can occur within one year, and you need to ask yourself whether the limit of your PI policy would be sufficient.
- The size of your contracts is also a factor. While you might limit your liability in client contracts, you are not immune to claims exceeding this amount. Ensure that the professional indemnity limit you select is sufficient for the size of your business.
Switching your professional indemnity insurance
Typically, in the UK, if you cancel a professional indemnity policy, you can no longer claim against it.
Therefore, if you switch your estate agent insurance provider, be sure your new policy covers your past work; this is called “retroactive cover”.
Should I retain estate agent professional indemnity when I retire?
It’s wise to keep your professional indemnity if you’re taking a break or retiring from real estate work. Claims against professional misconduct can surface months or years after you delivered the work.
Remember: If you cancel your policy, your insurance coverage will end, including coverage for any previous work.
How long you keep your cover in place is up to you. Consider the type of estate agency you ran and the likelihood that a client might bring a claim against you.
Public liability insurance for estate agents
Public liability insurance tends to be another critical cover for estate agents.
Most estate agents will meet clients at their offices and often drive potential buyers and tenants to show them around a property. A lot can go wrong, and you could end up with a compensation demand for an injury or property damage.
Public liability covers you if an accident happens to a person or their property, and they seek compensation.
What does estate agent public liability insurance cover?
Public liability provides legal defence and covers a possible payout if you're found liable for accidental property damage or causing an injury.
Cover includes:
- accidental injury or death
- accidental property damage
For example, you may be sued because:
- During a property visit, a prospective buyer let the seller’s pet out, and you’re now held responsible.
- You left a window open, and during a storm, there was water damage to the property.
- When getting out of your car, a prospective buyer injures themselves and they’re asking you to cover their medical bills
Other insurance estate agents buy
Your estate agency insurance needs will vary depending on your unique circumstances. Consider if you could handle a legal dispute, how negative publicity could impact your reputation, if you rely on costly computer equipment, how you would cover business expenses if you became ill, if you have employees, and if you have physical premises.
Commercial legal expenses insurance
Most commercial legal expenses insurance will protect estate agents against various tax and legal issues you may encounter due to your profession, which are not covered by professional indemnity or public liability.
At Suited, we combined £100,000 of commercial legal expenses insurance with helplines and other tools to better assist you in dealing with these issues, and it’s part of your subscription.
Commercial Legal Expenses offers qualified advice and assistance with:
- Legal and accountancy matters concerning your business
- Criminal prosecution
- Negative PR
- Compliance & regulation issues
- Unpaid invoices (over £200)
For example:
- Your client refuses to pay fees you earned
- Your client accuses you of breach of contract
- A dissatisfied client is publicly badmouthing your business
- A substantial invoice for your work is still outstanding despite chasing it
Portable electronics insurance
For estate agents who depend on electronic equipment, such as computers, cameras, and other tools, it is worth considering getting portable electronics insurance.
This type of insurance provides coverage for the cost of repairing or replacing your equipment in case of an accident, whether it is owned or hired. It is an excellent means of safeguarding your valuable assets and ensuring that you can continue to operate your business with ease.
By securing this type of insurance, you can have peace of mind, knowing that your business is protected from unexpected and potentially costly equipment damages.
Employers’ liability insurance
Employers are legally obligated to have employer's liability insurance if they have individuals working for them - regardless of whether they are full-time, part-time, contractors, or volunteers.
Employers' liability insurance provides protection for both the employer and employees in the event of work-related injuries or illnesses.
Property insurance
If you have an office, you may require property insurance to protect the content and possibly the building as well.
Cyber cover
For estate agents, having a website that is not only visually appealing and functional, but also serves as a promotional tool is of utmost importance.
This is because it not only showcases their properties, but also gathers information from potential clients. However, with the increasing number of cyber threats, it is essential to protect their business from potential breaches and attacks.
Therefore, having a cyber insurance policy in place is absolutely necessary to safeguard their website and business from any unforeseen cyber risks.
Estate agents we insure
Suited offers comprehensive insurance policies that cater to the needs of a wide range of estate agents, including:
- Property consultants
- Letting agents
- Property managers
- Commercial estate agents
- Residential estate agents
- and more..
Shopping for estate agent indemnity insurance
Whether or not you decide to use Suited estate agent insurance to protect your business, it’s worth keeping the following in mind:
Cheap estate agent insurance
When picking an estate agent insurance provider, don't just look at the prices. Consider the customer service too. At Suited, we offer multiple ways to contact us and always provide a quick response.
The insurer's reputation is essential
When it comes to insurance, it's crucial to have the assurance that your coverage will be there when you need it most. At Suited, we only collaborate with financially stable insurance providers who have a reputation for prompt payouts.
Many providers charge fees to amend or cancel
Several insurance providers may entice you with low initial prices, but they often come with hidden fees for monthly payments or policy changes. However, at Suited, we don't levy any additional charges, and you can cancel your policy at any time without any extra payments.
Some policy wordings are restrictive or have a high excess
It's also essential to consider the policy excess amount, as some providers may offer lower prices but with higher excess amounts that exceed the property ombudsman's guidelines. At Suited, our professional indemnity and public liability policies have a £0 excess, ensuring that you have the right level of coverage without any unexpected costs.
