Covered!


PROPERTYdrum Lettings Insurances Review PART 4 Professional Indemnity – invaluable protection for your business.


I


n the first three parts of this review we looked at insurances that letting agents may offer their landlord and tenant clients. These are all very worthwhile, can save thousands and thousands of


pounds for your clients and save you time and stress when things go wrong – because they provide valuable support as well as financial cover, often taking over the whole claims and court proceedings process. But let’s not forget your own protection. In an increasingly litigious world it is extremely important that your company and staff are protected too, right from the very start. This protection is, of course, also invaluable for estate agents, although because this feature has been all about lettings, we have not covered any detail as it applies to estate agents. However, the risks and the cover provided are very similar and estate agents need it as much as letting agents. David Scutt at Endsleigh says it’s not usually a complex process. “A letting agent start up approached us requiring immediate cover; we were able to arrange cover over the phone within 10 minutes, with no proposal form to complete, at a highly competitive price with interest free monthly payments.” Professional Indemnity for letting agents


or estate agents is not a legal requirement but it is required if you wish to be a member of NALS, ARLA, RICS or the NAEA. Additionally, as Steve Jones, Business Development Director at Rentguard says, “Professional Indemnity is also an FSA requirement for all businesses conducting regulated insurance business.” Several of the UK’s major specialist


property insurers provide this, we have reviewed the following: Kerry London, Letsure, FCC Paragon, Leaseguard, Homelet and Endsleigh and Rentguard. There is no product matrix to go with


this report as there is only one product reviewed and costs are calculated on an individual company basis.


What is covered? Professional Indemnity generally covers


the following risks: Neglect, Errors & Omissions Breach of Duty of Care Clients Legal Defence Costs Libel & Slander or Defamation Breach of Copyright Breach of Confidentiality Awards made by the The Property Ombudsman


Dishonesty of Employees. There are also more comprehensive


products, including the Professional


Indemnity Schemes offered by FCC Paragon, Kerry London and Rentguard which offer further cover on a Civil Liability basis which extends the cover to include risks such as: Negligent Misstatement or Misrepresentation Infringement of intellectual property rights Misuse of information Mitigation of loss Outstanding Fees Loss of documents Criminal Proceedings under the following Acts: 1. Data Protection Act 1998 2. Property Misdescriptions Act 1991 3. Estate Agents Act 1979 4. Health & Safety at Work Act 1978 5. Health & Safety at Work (Northern Ireland) Order 1978


6. Construction (Design & Management) Regulations 2007


Professional Indemnity (PI) is a


standalone insurance but insurers offer combined oe separate office policies such as Office Contents, Employers’ Liability and Public Liability, Directors & Officers Liability. (Kerry London, FCC Paragon, Leaseguard, Endsleigh).


In the best run firms, problems arise; minor, major, genuine, opportunistic...


Why is it important? In the best run businesses, problems arise, complaints may be genuine or simply opportunistic, major or minor, but they have to be dealt with. Leaseguard’s General Manager, Chris Knight, says, “Professionals cannot ignore an allegation of professional negligence. The allegation must be defended or admitted, and there will be cost implications in either case.” David Scutt at Endsleigh says that


Professional Indemnity is not a “statutory cover. It is not a form of insurance cover required by law (unlike motor insurance, employers liability etc). Certain professional bodies do make professional indemnity cover a membership


PROPERTYdrum DECEMBER 2010 55


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