Key takeaways
- Estate agents are exposed to a number of financial, legal and property risks that can be cost-effectively mitigated through business insurance
- Although your agency will aim to carry out its functions error free, mistakes can unfortunately occur - ensure you have adequate protection
In this guide, we’ll explain everything you need to know about estate agent insurance - including your risks, what covers you should consider, and how to find the best cover.
What is estate agent insurance?
Why do estate agents need insurance?
- Professional risks - negligence, breach of contract, breach confidentiality, breach of privacy, defamation, and vicarious liability.
- Cybersecurity risks - malware, ransomware, phishing attacks, social engineering, employee threats, and vulnerabilities with cloud services.
- Bodily injury and property damage - claims for compensation from third-parties or your employees for workplace injuries
- Director's risks - with evolving regulation, it makes operating as estate agent increasing difficult.
Key types of insurance for estate agents
1) Professional indemnity insurance
Estate agent's professional indemnity insurance will protect against a failure to exercise reasonable skill and care in provision of professional services. It is argurably the most important cover an estate agent should purchase because it offers protection against a wide range of liabilities such as professional negligence, such as providing incorrect advice, misrepresenting property details, or breaching your duty of care.
Most professional bodies in the property industry require their members to hold PI insurance, including the National Association of Estate Agents (NAEA) or the Royal Institution of Chartered Surveyors (RICS)
2) Public liability insurance
This cover protects your agency in the event of a claim for compensation is made by a third party for injury, illness, or damage to their property. For example, a prospective buyer trips on a loose carpet in your office and injures themselves. Public liability insurance will cover legal costs and any compensation awards if a business is found to have a legal liability.
3) Employers’ liability insurance
Is a legal requirement for any business that has employees and will offer financial protection against compensation claims arising from injury or illness at work. Employer's liability insurance will cover compensation awards, payments for medical bills, lost income, and legal costs and expenses. For example, an employee develops repetitive strain injury (RSI) from poor workstation setup, or trips over and injuries themselves at a property viewing. If you are found not to have the correct cover, the business can be fined up to £2,500 per employee per day.
4) Cyber insurance
Estate agents increasingly rely on digital platforms, CRMs, and cloud storage to manage sensitive personal data. Which makes them a target for cybercriminals and heightens the risk exposure to a cyber-attack or data breach. Cyber insurance can provide financial protection and expert support to help recover from a cyber event. For example, a hacker gains access to landlord bank details via a phishing email, and you are held responsible for the breach. Cover can provide incident response, legal liabilities, remediation, legal advice, and fines.
5) Directors and officers insurance
Otherwise known as D&O insurance, the cover provides protection for directors and senior management against personal liability arising from decisions they make on behalf of the company. The cover will pay legal defence costs incurred in defending allegations and damages arising from a judgment, award or settlement. For example, a liability can occur for breaching a third parties’ trust, when you are in a position of authority and have failed to act responsibly.
6) Property damage
Whether you own or rent your premises, office insurance can protect your physical assets such as furniture, computer equipment, and phones. Cover will typically include: buildings cover (if you own the premises), contents, computer equipment, and business interruption cover. For example, a fire, flood, or burglary, can result in extensive property damage.
How are estate agents activities measured by risk?
-
Lower risk activities - include arranging both residential and commercial property sales and letting
-
Medium risk estate agent activities - include rent reviews, arranging insurance, arranging mortgages, planning and development consultancy, and energy assessments
-
Higher risk estate agent activities include both residential and commercial surveying and valuation
How much does estate agent insurance cost?
- Professional Indemnity: £250 - £1,500+ annually
- Public Liability: £100 - £500 annually
- Combined packages: From £500 annually for small firms
Is your estate agent insurance adequate?
Get your quote by completing our digital onboarding
Or arrange a call back to speak with one of our expert advisors
About the author
Simon Taylor is a respected senior industry professional and a Chartered Insurance Broker with over 20 years’ of experience in the commercial sector as an underwriter, broker and director.