Professional indemnity insurance defends you against claims of negligence, breach of confidentiality, dishonesty, libel and slander. We offer up to £10,000,000 cover.
Bringing landlord and tenant together over the perfect property is your best-case scenario.
Getting caught in the middle of a contract wrangle or property dispute is probably your worst.
If things go wrong, are you sure you’ve given the right advice and followed the right procedures? Even if you have, when there’s thousands in rent and deposits at stake, you could face some pretty tough questions.
Get the answers wrong and your clients are likely to blame you for their losses. And that leads to allegations of negligence.
If that happens, professional indemnity insurance for letting agents pays for an expert to fight your corner, helps right your wrongs, and compensates your client.
You can’t be an ARLA member without it.
But letting agents’ insurance is more than just a ticked box, of course. It’s a potentially business-saving investment too.
Putting yourself out there as the resident expert means you have to cross every T and dot every I. Miss something and, as the professional link in the chain, you’re financially liable for your mistakes.
Your clients have the right to sue you if they think you’ve slipped up or not done what you said you would and it’s cost them. When there’s money involved, it takes surprisingly little for the accusations to start.
Even if you’re sure you’re right, it’s up to you to prove it. That takes time and money – both of which your professional indemnity insurance pays for. Having it means you don’t have to worry about expensive legal bills, or the impact of a claim on your business.
ARLA say you need a minimum of £100,000.
If your business operates as an agency in residential lettings, and your total annual fee income is £150,000 or less, you need at least £150,000.
On the other hand, if your business operates as an agency in residential lettings, and your total annual fee income is more than £150,000, you need at least £500,000.
Bear in mind that these are minimum recommended amounts. What’s right for one business isn’t right for all and you might need considerably more.
Think about your clients (and how much you do for each one), your annual turnover, and the property values. The greater your responsibility, the greater your liability, the more money a claim is likely to cost. Best not to scrimp.
Allegations of negligence brought against you by clients and third parties. Usually, it’s because a mistake in your work has left your client out of pocket.
Specifically (but depending on the policy wording):
But that’s not all. Some professional indemnity policies can fix a mistake before your client is even aware of it, thereby preventing a claim in the first place.
If you have any employees, employers’ liability insurance is a legal requirement. If an employee suffers an injury or illness as a result of working for your company, they can sue it for damages. Your insurance can cover their compensation, plus any legal fees.
If you visit clients, or they visit you, consider getting some public liability insurance. This covers you if someone is injured, or their property is damaged, and you’re to blame.
Office and property insurance covers the things in your office (furniture, plants, fixed IT equipment etc) and portable insurance covers gadgets and technical equipment away from the office (laptops, tablets, projectors etc). If you’re not sure it’s worth insuring, add it all up – it’s probably worth more than you think.
Business interruption insurance means you can still work when your office is out of action. Be it flood, fire or flea infestation, you’re covered for the costs of setting up elsewhere and for any lost revenue in that time.
If you’re a company boss, you can protect yourself with directors’ and officers’ insurance. Anyone can accuse you of not running your business with due care, and in the UK, company directors are personally liable for their actions. The good thing is this insurance covers your defence costs and any compensation you have to pay. So you can put away your chequebook.