Lettings agents are being urged to protect their livelihoods and the livelihoods of their clients by ensuring they are covered by Professional Indemnity (PI) insurance.
Professional Indemnity insurance covers the agent and their business for costs they may have to pay as compensation to clients and landlords as a result of allegations of professional negligence or problems with any advice gives.
This can be anything from a landlord’s loss of rental income if an agent fails to vet a tenant properly, to losing confidential documents or data.
If a client is not happy with the service an agent provided, they could be held liable and the professional reputation of the business could be put at risk.
Nathan Walton, managing director at JSW Insurance Services Ltd, said: “PI insurance is no longer a ‘nice to have’ for letting agents, it is an essential in the UK’s increasingly litigious business environment.
“For some letting agents, knowing that they are risking financial and professional ruin by not covering themselves is enough for them to obtain PI cover. But there are many more letting agents out there who don’t carry sufficient cover and are putting themselves and their clients at huge risk.”
Having recently expanded Landlordsure.co.uk, which is a division of JSW, the company now boasts a complete insurance package designed exclusively for letting agents and estate agents offering lettings. Uniquely, the package can also provide Professional Indemnity (PI) insurance as standard.
It is a compulsory requirement of ARLA (Association of Residential Letting Agents) membership that agents are protected by appropriate PI insurance. ARLA requires members to purchase limit of indemnity of £150,000 where fee income is less than £150,000.
Where the income level exceeds £150,000 the minimum limit of indemnity purchased must be £500,000.
Walton warns: “Every letting agent is at risk, even if you are operating within all of the professional and moral guidelines that you should be. The public has become far more aware of their legal rights, particularly with ‘no win, no fee’ arrangements continuously touting for business. This litigious influence on our society leaves all agents exposed.”
Most professional indemnity products for estate agents and letting agents group the two professions together and provide the highest level of cover for all of the risks carried by both.
But JSW claims this means that those specialists that aren’t involved in mortgage lending surveys, and who carry a lower risk as a result, are actually paying higher premiums than they should be.
Landlordsure.co.uk is offering members of recognised trade or professional bodies and associations, such as ARLA (The Association of Residential Letting Agents), a discount on their insurance.
