Estate agents / letting agents frequently asked questions

On this page you will find frequently asked questions for estate agents and letting agents.

Please click on each of the questions below for further information.

What is Professional Indemnity (PI) insurance?

Professional indemnity insurance is a form of liability insurance which pays for legal costs and any compensation payments that may be due in the event of legal action against the insured entity for an error or omission made in provision of professional services or advice given.

This form of insurance is made compulsory by a number of industry’s trading bodies and membership associations including RICS, Propertymark, UKALA, NALS and others. The highly litigious environment that exists today means that having PI insurance is highly recommended as no business is immune from claims by third parties. Unlike other types of insurance, PI is written on a ‘claims made’ basis. In other words, the policy will only respond to a claim first notified and accepted by insurers during the period of insurance, irrespective of when the alleged act of negligence occurred. Mostly, PI cover is offered on ‘any one claim’ basis, which means there is no restriction on the number of claims made in any one policy year but each claim has a maximum upper limit.

How much does PI cover for letting and estate agents cost?

The cost of PI cover depends on your personal circumstances such as annual fee income, type of activities and claims history. As a guide, the annual cost of PI insurance for a small to medium size high street agency would be a few hundred pounds.

What is Employer’s Liability (EL) insurance?

This type of insurance provides protection against your legal liability for damages and legal costs arising from injury to any person employed. In the UK, EL cover is made compulsory for any business employing staff.

What is Public Liability (PL) insurance?

This type of insurance provides protection against your legal liability for damages arising out of accidental injury to any person or accidental loss or damage to third party property. Whilst this type of insurance is not compulsory, purchasing it is highly recommended.

What is Office Package insurance?

This type of insurance product offers protection against physical loss or damage to the insured property (such as office building, IT equipment, general office contents belonging to the business) caused by an insured event such as fire or flood. The policy may often be extended to include additional types of cover, such as Business Interruption, Legal Expenses and Terrorism.

What other types of insurance cover should I consider?

Depending on your personal attitude to risk, company size and risk exposures, the other types of insurance cover you may want to consider include:

•  Directors' & Officer's Liability
• Cyber Liability
• Motor Fleet
• Commercial Legal Expenses

Examples of PI claim against estate and letting/managing agents

A letting agent did not obtain a suitable guarantor when letting a property. After the tenant defaulted on rental payments and was evicted, the landlord pursued a claim against the letting agent for the rental arrears.

A damages claim made by a tenant who sustained a personal injury in a rented property, despite numerous requests for managing agent to carry out necessary repairs inside the property.

Estate agent was held liable for losses arising from a failure to accurately prepare and distribute sales particulars of a property.

A claim for negligence / breach of professional duty made by the vendor where an estate agent failed to give accurate advice on market value.