A guide to business insurance for property professionals and estate agents

As a property professional, your expert knowledge of the housing market is relied upon by your clients.

This exposes you to potential claims for business risks such as incorrect advice, failure to take action expected by your client, and even potential claims for damages for losses in relation to a property sale.

Caunce O’Hara business insurance for property professionals offers comprehensive cover to provide you with the peace of mind you need to complete your work without worry.

Property Professionals’ insurance is designed to provide indemnity and liabilities cover for estate agents and letting agents against claims of negligence and customer accidents, such as a trip or slip.

Our insurance policies will provide cover against the legal implications that may arise if you make a mistake in your work that costs your client money, or if a member of the public was injured due to an error on your part.

In this guide we highlight the business insurance policies that are beneficial to property professionals.

Professional Indemnity Insurance for property professionals

Widely regarded as the most important business insurance policy, professional indemnity insurance (PI) is vital for businesses offering services, advice or designs to clients.

No estate agent, letting agent or property professional sets out to intentionally give poor advice to their clients, but mistakes can happen due to unpredictable, fluctuating markets.

Disgruntled clients, such as buyers, sellers, landlords and tenants, can feel aggrieved if they lose money as a result of your advice and can pursue legal action against your firm in a bid to recoup their financial loss.

An example of how professional indemnity insurance can help:

PI will respond to cover you for the legal costs of defending a claim of negligence from a client.  Negligence can include not pricing a property correctly for a sale… priced too low and the property sale could cause your client a financial loss, priced too high and the sale could be delayed which could also cost your client money.

Negligence can also arise from a letting agent not being thorough in their tenant reference checks and as a result missing vital information that later causes their landlord client money.

Public Liability Insurance

If you operate a business where you meet clients face-to-face daily, especially on your own business premises, then you will need public liability insurance (PL) to ensure your business is covered and your clients are protected when they visit you.

An example of how public liability insurance can help:

Public liability insurance will provide cover if a third party, such as a member of the public, trips and sustains an injury which causes them to take time off work. In this instance, they could claim against you for their lost income. This example highlights how easy it can be to end-up on the wrong end of a claim for an accidental occurrence.

In a similar way to Professional Indemnity insurance, Public Liability insurance is commonly stipulated as a requirement for businesses.

At Caunce O’Hara, Public Liability insurance is offered as part of our Business Combined liabilities insurance policy, which also includes Employers’ Liability insurance and general contents cover. The policy also offers optional cover to protect your portable equipment when you are working away from the office.

Employers’ Liability Insurance

Employers’ liability insurance will provide cover for the costs incurred in defending or settling a claim against from an employee who has suffered injury or illness because of the work they do for you. The policy will enable you to meet the cost of any compensation awarded which can include: medical costs, legal costs, loss of income, as well as any other damages.

How can employers’ liability insurance help property professionals?

If you are a business with employees, then you will be required by law to carry Employers’ Liability insurance (EL) under the Employers Liability Act (1969) with a minimum level of cover of £5,000,000.

Examples of when employers’ liability insurance can help include:

• An employee, who hasn’t received the correct training or hasn’t completed their training, injures themself as a result of the work they undertake for you and requires time of work.
• An employee working in the same position daily for hours on end could suffer a repetitive strain injury as a result of their work.
• A former employee becomes ill because of the work they performed for your business.

You should check your policy documents carefully to confirm what exactly is covered and what the exclusions are.

Office Contents Insurance for estate agents and lettings agents

Whether you run your property business from an office or from home, this insurance covers your office contents including computers and other electronic office equipment, furniture, stationery and documents whilst within your property.

These Items owned by the business would not be covered under a household insurance Policy. How would you cope if one day you arrived at your office to find your computers had been stolen?
Your contents are covered for All Risks which includes but is not limited to theft, fire, water damage from burst pipes and malicious damage.

You can cover the value of your office contents up to £10,000. The cover is subject to an excess of £100 which means that you will pay the first £100 of any loss or damage. In respect of mobile phones, the policy excess increases to £250 for each claim.

It’s important to remember that the value you should use, so as not to be underinsured, is the new replacement cost to replace the items lost, damaged or stolen.

Portable Equipment Insurance

Many property professionals who regularly work out of the office are at least provided with a mobile phone and a laptop and even a digital camera or video camera for filming walk-throughs.

How would you cope if your work laptop was stolen? And how would you manage the loss of potentially sensitive data that might be stored on the laptop?

If you are a self-employed property professional, then this can be an extremely stressful situation as many people run their whole life and business on their mobile phone and laptop.

How portable equipment insurance can help

Should you lose, damage, or have these items stolen, while you are working out of office portable equipment will respond to cover you for the loss of your equipment.

The cost of replacing technical equipment such as smartphones, laptops, digital cameras and video cameras can run into thousands of pounds, so it is prudent to ensure your portable equipment is covered.

Cyber Insurance

Cyber liability insurance, provides cover for your business in the event of a malicious attack on your computer systems and data. As a property professional you will likely handle large sums of money from clients, landlords, and potentially from investors.

If you store sensitive data about your clients, business partners or employees on laptops, tablets and other internet connected devices, cyber insurance is widely considered as a vital type of cover for your business and a worthwhile investment.

With an increasing number of criminals operating online and actively targeting small businesses, a data breach could have serious consequences.

A targeted cyber-attack that takes down your website, wipes business-critical data or steals your clients’ personal information could have financial consequences for your business.

At Caunce O’Hara we understand the cyber threats facing your business. We offer a specialist cyber insurance policy (underwritten by Markel) that has been tailored to protect your business in the event of a cyber-attack by providing access to a cyber response helpline manned by information security experts, as well as covering you for:

• The costs of restoring data and equipment
• Informing clients of a data breach
• Assistance in the event of a ransom demand
• Loss of your net profit
• Legal defence costs and damages you are liable to pay to other parties.

Commercial Crime Insurance 

Commercial crime is increasing year-on-year with criminals using sophisticated ways to defraud businesses. Our commercial crime insurance product features;

• Genuine all risks insuring clause, providing protection for all crime exposures
• Theft from the insured by anyone (whether employed or not) is covered

Unlike some policies, we don’t limit theft by third parties to certain activities, e.g., incoming cheque forgery or securities fraud. Therefore, there is no danger that third party theft could fall outside of the cover and fail to trigger the policy. The commercial crime policy covers theft by a third party however it is perpetrated.

Limits of indemnity

We offer two limits of indemnity – £50,000 and £100,000.

The excess is dependent on your company turnover. if your turnover is under £500,000 (on our Freelance scheme) the excess will be £2,500.

How commercial crime insurance can help

A member of staff opens an email claiming to be from a service provider. Without realizing they have inadvertently loaded spyware onto their computer allowing a third party to track keystrokes and potentially infiltrate your wider company computer network. Logging into online banking accounts provides fraudsters with all they need to access the funds.

You are contacted by the fraud team at your bank advising of suspicious activity on your account. They have given you the account details of a safe account and advised you to transfer the money or they will not indemnify you for future losses. You follow their directions but did not realise that it wasn’t the bank calling and you have lost the money you transferred to a fraudulent account.

This policy does not cover:

• Client Cover – the policy will only provide cover for your business assets and not those you hold in trust on behalf of someone else
• Indirect or consequential losses
• Kidnap, Ransom or Extortion – please contact us if you require this cover, more suitable policies are available
• Past Knowledge of Fraud – coverage stops at the point where you have reasonable suspicion that a crime is being committed, losses after this point are not included.
• Trading Losses

Directors & Officers Insurance

While many people believe they have no personal liability as a director or officer of the company they work for, in truth directors, managers and supervisors can face allegations and claims for which they may be personally liable.

Directors & Officers (D&O) insurance will cover your directors and managers to protect them from claims which can arise from the decisions and actions they have taken as part of their role.

The legal definition of a director(1) is clear, yet the legal definition of an officer(1) is opaque and allows for claims to be issued against people who are working in managerial or supervisory positions.

As a company owner/director of a property company or estate/lettings agent you might be confident that your director’s are aware of their legal responsibilities, but it is possibly more important to ensure that your managers and other senior members of staff, who may occupy supervisory positions, understand the problems that can arise by their actions.

Allegations and claims against directors and officers must be investigated, which can cost a lot of money and place the personal finances of the individual/s in question at risk. Therefore, it is essential that companies provide protection with Directors & Officers insurance.

What level of insurance cover do property professionals need? 

The level of protection you need will depend on the value of the work you do and your potential risks and liability.

Caunce O’Hara can help you build the ideal insurance policy that will help protect your business. We offer specialist policies tailored for the professionals in the property industry and provide a level of protection to suit your requirements.

To start a quick online quote for your business insurance, click the button below, or give us a call on 0333 321 1403.

Sources:

1. Companies Act 2006 – Part 10: Company Directors https://www.legislation.gov.uk/ukpga/2006/46/notes/division/5/28
2. https://www.alanboswell.com/news/liabilities-of-company-directors/