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Real Estate Agents & Strata Managers: Professional Indemnity Risk Exposures

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Real estate agents, property managers and strata managers have special risks that other business don’t have in advising on and managing property. It’s important to know these to be able to manage the risks, also ensure you have the right insurance to protect you and your business from allegations of negligence.

So what are the key risks and how can your Professional Indemnity Insurance help to protect the financial risk to you and your business?

What is Professional Indemnity Insurance?

This insurance covers you, the agents as well as your business against claims of both actual and alleged negligence when providing advice or an error or omission when acting in your role as a real estate agent, property manager or strata manager. This can relate to someone falling down the steps of a tenanted property, breach of privacy, fraud or dishonest conduct of employees, loss of documents or incorrect advice. You may also be responsible under a contract (contractual liability) you have in place with your client.

Professional Indemnity Insurance will pay your legal costs and expenses from experts hired to investigate the issue, whether your found to be negligent or not. The policy will also pay for any damages awarded by a court. This cover applies to civil liability claims, breach of consumer law, personal injury and property damage claims. In addition, the policy will pay for a public relations consultant to help protect your personal and business reputation.

Professional Indemnity Insurance is essential to manage the financial risks related to legal costs, which can be tens of thousands in addition to any damages that may be awarded by the courts, which can be substantial.

What risks are faced by Real Estate Agents, Property Managers and Strata Managers?

Whilst real estate agents, property managers and strata managers have slightly different roles, usual responsibilities include co-ordinating and arranging property maintenance. Estate agents and property managers act on behalf of landlords to ensure that the property is well maintained and safe, whilst strata managers act on behalf of the committee to keep the property and common areas safe. Advice is also provided in respect to sales and rental books.

Professionals have a duty of care to clients; this may be as the agent of the client or as a professional advisor. This advice if acted on, may cause financial loss or if property maintenance is overlooked, people may be injured or property damaged. Examples of these allegations include slipping injuries due to inadequately maintained pest control or injuries due to poorly maintained lighting or handrails along stairways. As property is usually a client’s largest asset, if anything goes wrong, it’s easy to see how real estate agents, property managers and strata managers can be open to complaints and potentially expensive legal action.

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

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Business Package

Purchase up to six products under one Business Insurance Package.

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How can Professional Indemnity Insurance help?

Professional Indemnity Insurance can be of benefit to any professional individual, agency or business in the real estate industry. This risk and extent of insurance will depend on the type of business.

Although the industry has standard types of risks, every business is different. The right Professional Indemnity Insurance will provide a comprehensive financial protection, whether you’re a real estate agent, property manager or strata managers. Your policy will pay legal fees whether the allegations are proven or not and any damages, if awarded by the court.

To discuss the right Professional Indemnity Insurance for your business, talk to an insurance professional today and find your local adviser.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.