requirement, however even when this is not the case we would still recommend that agents hold adequate Professional indemnity cover.” Bryn Cole of FCC Paragon says that it is


important to remember that an allegation of a professional error or omission does not have to be successful to cost money. “A PI policy can provide a very useful defence mechanism for spurious allegations.”


What Will it cost? Premiums vary depending upon turnover, trading history, type of business, claims experience, but expect to pay from £200 plus five per cent IPT per year. Bryn Cole says that the majority of


people they insure moved to FCC Paragon because they save money. “Sometimes the saving is up to 40 per cent when they combine their office and other covers with the PI and utilise the interest free direct debit to maximise the savings. What is also quite common is that we improve upon the cover purchased, some insurers are still offering very restrictive cover under a miscellaneous format legal liability wording or even a negligence based wording.” It is another expense for letting agents


but some of the industry bodies work with insurers to offer preferential rates for their members. Jane Venning, Divisional Director of Kerry London, says that they offer special rates and services for agents accredited by NALS, many of whom have moved to Kerry London because they like the simple quotation process, the competitive rates, and the wide cover and the fact that they can pay by interest free instalments.


stEVEN Elliott lEtsurE


Professional indemnity: The risk is the agent’s personal choice to take.’


isn’t a condition of the policy.” It makes sense though! Professional bodies set codes of conduct and acceptance criteria, it’s the agents choice to comply. Andrew McMillan says that agents who don’t purchase PI face the risk of covering costs relating to professional negligence, “The risk is the agent’s personal choice to take.” FCC Paragon supply PI on its own or


help agents to keep life simple by wrapping up office insurance from £210 including IPT, the office package includes Public and Employers Liability, contents and computers, portable equipment, business interruption and legal expenses and is exceptional value. Bryn Cole says, “For a start up firm being able to buy your PI and comprehensive office Insurance from £450 plus Insurance Premium Tax is an attractive prospect. You can also opt to pay the cost over 12 months interest free.”


Homelet’s Andy Wynne-Jones says their


discounts work in the opposite way. “We offer discounted NALS membership to our Premier and PremierPlus customers who also get a discount on our PI policy.” Leaseguard works with some Landlord associations to offer special rates. Insurers may require letting agents


to have a full complaints procedure in place before agreeing PI. Andrew McMillan, Head of Products and Marketing says, “It depends, if it is related to FSA regulated insurance activities then we do need evidence of a complaints procedure. This would usually apply to Principals and Appointed Representatives.” And so do some of the


stEVE JoNEs rENtGuarD iNsuraNcE


If you are FSA regulated, you must be sure to have Professional Indemnity cover.’


professional bodies. Jane Venning says, “Yes, agents who are members of NALS, ARLA, RICS and the NAEA are required to have a complaints procedure. It is also a requirement of The Property Ombudsman, but it is also good practice for all agents to have a complaints procedure in place.” Complaints procedures are part and


parcel of best practice; if you have good risk management procedures in place you will represent a better risk, meaning it’s less likely that you will be to have a paid claim, so ultimately your PI premium should be lower. Andy Wynne-Jones says, “We recommend that our customers have a robust claims procedure in place, but this


PROPERTYdrum DECEMBER 2010 57


You have to weigh up the risk – insure or, perhaps, be crippled by a claim.


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