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Letting Agents – Professional Indemnity Update





Professional Indemnity claims continue to rise across all sectors, but a new report has found that PI claims are on the rise for letting agent sector, now representing over a quarter (26%) of claims.

Over recent years the hard market of PI has been a challenge for many professionals, but the uncertain economic landscape combined with a surge in claims means this is also a critical challenge for letting agents now too.

Like other professionals within the Property & Construction sector, letting agents may be confident in the quality of their work, and the advice and services they provide to clients, but any business is vulnerable to a claim of negligence when professional advice or services fail to meet a client’s expectations.

Professional indemnity insurance, or PI, can help protect you if a client brought against you as a result of a problem with work you have done for them. A professional indemnity policy will offer cover for compensation you may need to pay to correct a mistake, or cover any legal costs due to negligence, such as giving incorrect advice or making a mistake in your work.

Do Letting Agents need Professional Indemnity Insurance?

As well as the traditional professions whose governing bodies require their members to have a professional indemnity policy in force, there is an ever-increasing group of professionals classed by insurers as ‘miscellaneous’ businesses.

Anyone who offers advice or consultancy for a fee is deemed to be a professional and therefore has an exposure to a professional negligence claim. In addition to the miscellaneous businesses there are those clients who may perceive they have no professional negligence exposure, but who have a contractual liability which requires them to have a professional indemnity policy in force.

These businesses often have a ‘contingent liability’ as although they do not provide professional advice or consultancy directly, they sub-contract this activity out and they remain the first port of call in the event of a problem or claim.

What will PI Cover?

A professional indemnity policy will provide cover to protect you against an alleged claim/claims for financial loss, arising from your negligence. The cover can be in respect of settlement and/or the legal defence costs and expenses incurred in defending your position.

Areas where you or your business could be exposed may include:

Professional negligence – such as neglecting to arrange the required Gas and Electrical Certificates, inadequate tenant referencing, or failing to carry out property management services and repairs
Breach of confidentiality – such as accidentally disclosing sensitive information to the wrong recipient, which could include personal data, development plans or planning permission details
Loss or damage of documents – such as ID’s, evidence of disrepair allegations, dispute documentation and property deeds or titles

PI cover is a crucial element of a business’ resilience strategy, helping you safeguard the lettings agency you have built, protecting your reputation and your finances. Working with a broker and PI insurer that understands your business and your sector will ensure you have the right cover in place – and any claims you face will be dealt with efficiently, minimising the impact on you and your business.

Wilsons have helped countless professionals and firms to rectify ineffective professional indemnity insurance and set up comprehensive and cost effective insurance cover. We have moulded our service to provide a top quality consultative approach to make sure every client gets exactly what they require.

Can we help?

If you would like to discuss how we can help you ensure your lettings agency is properly protected, or you need help with insurance for your properties, just get in touch with me at [email protected], call on 0115 942 0111 or connect on LinkedIn