Talk to us about your Real Estate Business
Insurance for Real Estate Agents: PI Specialists Australia: Protecting your business, reputation and clients.
Providing professional advice in the sale and management of property is the core service of a Real Estate Agency, and because of this they are exposed to significant risks; they may be responsible for funds in a trust account, have sensitive client data in a CRM, perhaps they did not conduct an auction properly, or with a busy schedule forgot to follow up on an important repair.
Having insurance for real estate agents in place can help with the management and transfer of such risks, giving real estate agents peace of mind and support necessary to run a successful agency.
At Barrack Broking, we have serviced clients from all over Australia with the sole purpose of helping them succeed. Using our combined experience, Barrack Broking has developed a unique approach that will identify, manage and transfer risk, which enables real estate businesses to meet their business goals and flourish.
What are the risks faces by Real Estate Agents?
Real Estate professionals interact with a large number of stakeholders in performing their duties: providing information, making recommendations to clients while effecting Real Estate sales and property management. These activities give rise to claims for breaches in professional duty.
Some of the common claims include:
- Breach of professional duty of care when valuing property, or conducting checks on tenants.
- Negligent acts, errors or omissions, such as advertising mistakes, or mistakes in executing residential or lease contracts.
- Loss of documents or sensitive client data.
Real Estate professionals regularly attend the properties of their clients, or have clients attend their office. There is a risk that the agent could cause personal injury or property damage to someone during these visits.
Directors and officers are required to manage a business in compliance with many rules and regulations. A breach of these rules, such as Corporations Act, ASIC regulations, WHS regulations and Employment regulations, can cause company and personal liability in the way of fines, legal expenses and damages.
Real Estate Agents hold large volumes of sensitive personal and corporate data (including rental applications, credit reports, credit/debit card details). The Agencies are responsible for the safe storage and protection of this data and may be held responsible if a breach takes place.
Property damage risks are related to office property and portable electrical items (laptops, phones, tablets). Electrical equipment, desktop fans or faulty wiring and kitchen appliances pose a fire hazard in an office environment. Moreover, the cost of reinstating client records, keys and data can be significant.
What are some claims examples that could be covered by Insurance for Real Estate Agents?
A purchaser purchased land from an agent. The advertising material from the agent stated that the block of land was fully serviced and sewered and ready to build on. A purchaser brought a transportable house and found that the information the agent provided was not accurate and that the water was not connected to the block. The purchaser lodged a claim against the agent.
A tenant claimed she was injured after they tripped on a loose paver in the driveway of the property. A month prior to the incident, the tenant had complained to the managing agent of the loose paver, however repairs were not organised in a reasonable time leading to the injury of the tenant. The tenant lodged a claim against the agent.
Under instructions from the owner, the agent leased a commercial property to a retailer. After completing set up of the shop, the tenant was informed by the complex owner that there was a restrictive covenant in place that prohibited the premises being used for retail purposes. The owner and the tenant lodged a claim against the agent.
An Agent was showing a property to a potential buyer. The property had a very steep driveway, which was wet after heavy rain. The visitor slipped and fell, sustaining injury. The visitor lodged a claim against the agent.
An Agent, during a visit, caused property damage to the house (accidentally drove into the mailbox). The owner lodged a claim against the agent.
The Principal of an Agency was on Holiday and the office manager received an email from a hacker posing as the Principal. Hackers had infiltrated their email address and used past emails to pose as the Principal and request a funds transfer. Because the email seemed legitimate, the office manager trusted the request and transferred the funds, resulting in a cyber liability claim.
Melbourne Business Insurance
Some Australian States and Territories require Real Estate Agents to hold a minimum level of Professional Indemnity insurance as part of the agent’s licence. In any respect, to have a comprehensive insurance program we recommend that all agents consider the following insurances:
- Professional Indemnity Insurance: Professional indemnity Insurance covers the legal liability to compensate third parties who have sustained financial loss due to a breach of professional duty by the Real Estate Agent.
- Management Liability Insurance: Covers damages and legal expenses incurred due to an alleged breach of duty, misleading statement or wrongful act by a director or officer
- Public & Products Liability Insurance: Covers legal liability to pay compensation to third parties for bodily injury and property damage caused by the agent’s business activities.
- Cyber Insurance: Cover for both First Party and Third-Party losses as a result of Cyber events and security breaches including (but not limited to): hacking attacks; Virus and any malicious software codes; actual or suspected breach of privacy, and social engineering.
- Business Package: Covers the cost of repairing or replacing physical assets following loss or damage by an insured event.
Talk to us about Insurance for Real Estate Agents
Whether you run a busy franchise, independent agency or contracting agent, Barrack Broking has a specialist team dedicated to helping arrange Insurance for Real Estate Agents. Contact us to discuss a tailored insurance program that meets your operational, professional and regulatory requirements.
