Whether it’s selling the house of someone’s dream, or making that rental a reality, the world of real estate involves keeping your finger on the property market pulse and strong industry knowledge. People seek your advice and want to know what steps they should take with some of the biggest decisions and financial transactions of their life.
No pressure right? Being a real estate agent is a big responsibility, and even with all the training, skills and experience, perceived or actual errors and mistakes can unfortunately occur. This is when the protection of Professional Indemnity insurance* can help to provide support in a time of need.
What is Professional Indemnity insurance?
There are different types of business insurances available to cover and protect against different kinds of risks. As a real estate agent, you are a professional who not only has the gift of the gab, but a whole host of knowledge when it comes to giving property and industry advice to others, so when things don’t follow the blueprint it is reassuring to know there is some protection in place.
Professional Indemnity (PI) insurance is an important form of protection for businesses that provide
specialist services or professional advice. It is designed to respond to claims against your business for
losses as a result of actual or alleged negligent acts or omissions in the provision of your professional
service or advice. Professional Indemnity insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy.
Why do real estate agents need to consider Professional Indemnity insurance?
Word of mouth and reputation and one of the things which can make or break a real estate business, especially in such a competitive industry. Having protections in place like Professional Indemnity insurance can give you peace of mind.
Here are some examples of why real estate agents may need to consider Professional Indemnity insurance:
- It may be a requirement to join and become a member of certain industry bodies- make sure you check the minimum amount of cover that you need to have
- If things don’t exactly follow the drawing plan when giving advice to your clients, you may land yourself in hot water- a drama most people can do without!
- The financial implications of a claim could be enough to send you out of business. Could you afford to pay for the associated legal costs and potential settlement of a claim?
What does Professional Indemnity insurance typically cover?
Pour yourself a coffee and take some time to really understand what your Professional Indemnity insurance policy provides cover for. If you are not sure about your specific policy’s coverage, check your Product Disclosure Statement (PDS) or ask your insurance provider for more information.
Professional Indemnity insurance policies usually cover the following events:
• Legal expenses, such as costs related to your legal defence, court attendance, and responding to disciplinary inquiries
• Costs associated with formal and informal investigations of the claim
• Damages awarded to the claimant
• Public relations
• Providing negligent or misleading advice
• Breaches of duty, such as confidentiality and other privacy issues
• Defamation, libel or slander
• Intellectual property and copyright infringement
• Loss or damage to client documents
• Bodily injury or illness caused by the professional services covered under your policy
What it doesn’t cover
Not sure what your Professional Indemnity insurance policy covers and excludes? Check your PDS or ask your insurance provider for more information.
This is what is typically excluded from a Professional Indemnity insurance policy:
- Intentional damage
- Known claims and circumstances
- Fraud and dishonesty
- Bodily injury / property damage
Selling houses and sharing your expert advice doesn’t need to be a worry and neither does getting your business insurance arranged for your real estate business *. BizCover provides Professional Indemnity insurance and other business insurance solutions that can be tailored to suit the unique risks and needs of your real estate business.
Policies may provide coverage anywhere from $500k – $10m in limits, allowing you to have the flexibility to select the level of cover to suit your real estate business, its size and coverage requirements.
To find out more visit bizcover.co.nz and get insurance for your real estate business insurance sorted without drama so you can get on with your day. If you’d prefer to pick up the phone and chat, you can find us at 0800 249 268.
*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Limited.