PI insurance is an essential insurance cover for any business where they may be giving advice or providing a service. As a letting or estate agent you could find yourself liable for the financial loss of a client caused by an error or omission in advice or information which you or your employees provided in the course of your business.
Mistakes can happen which is why PI provides a safety net in case you need to pay compensation, it can also provide cover for legal defence costs associated with a claim.
Steve Jones, Director of RGA Underwriting Ltd, had this to say: “At Rentguard, we firmly believe you should have confidence in your expertise and trade but when it comes to work, anyone can make a mistake."
Policies can be tailored so that PI insurance offers cover for unintentional breach of intellectual property, employee dishonesty, defamation and loss of documents too.
This is important to consider because no matter how robust your processes are, human error cannot be eliminated 100%, meaning that a mistake by one of your employees could lead to a claim being brought against your business.
For example, in order to quickly let a property one of your employees fails to obtain references on a new tenant. The tenant then falls behind on payment and eventually defaults on their rent and disappears from the property. The landlord could then pursue you as the letting agent for the unpaid and outstanding rent.
In certain situations, the letting agent might not have even made an error but the cost of defending yourself against a claim can be very high.
The prospect of a complaint or the allegation of negligence can be very stressful and daunting but PI insurance can ease this anxiety and provide reassurance to clients as well.
“Professional Indemnity Insurance can help put things right and will keep your business going even if the worst comes to worst. It’s an important type of protection to consider for letting agents and property managers who are providing advice and dealing with personal client information,” adds Jones.
