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Working as an estate agent to help people find or sell their dream home can be rewarding and lucrative. But if a client’s dream turns to disaster or they are injured during a viewing, they could hold you responsible and make a claim against your business.
As with any profession that involves giving advice, estate agents run the risk of being sued for negligence if that advice leads to financial loss.
But estate agents also face plenty of other risks that could have expensive consequences. The best way to ensure you’re protected is to take out an estate agent insurance policy for your business.
Read on to learn more about estate agent insurance and why you need it.
What is estate agent insurance?
Estate agent insurance is not one specific policy but rather a set of policies that could protect you and your business against anything from claims of professional negligence to accidents involving members of the public and damage to your office and equipment.
One of the biggest risks you’ll face as an estate agent is being held liable for a decision that results in financial loss for your client or causes a contract to fall through.
That’s why professional indemnity insurance for estate agents, which covers claims for loss or damage because of negligence, poor advice or bad service, should be the main feature of your policy.
You should know that claims can be made against you, whether your advice was paid for or free – and without insurance, the costs of a court battle and compensation could potentially be ruinous.
A client can make a claim for negligence against you for up to six years after the event took place, so if you decide to change insurers or leave the profession you’ll need to buy a ‘run-off’ policy to cover you against any future claims.
Another big risk is causing injury, or death, to a member of the public. Similarly, you could be liable if a member of the public experiences damage, theft or loss of their possessions or property during the course of your business activities.
Whether that’s someone tripping in your office and twisting their ankle, or you smashing the window of a client’s property, public liability insurance can cover legal costs and provide compensation.
Other types of business insurance for estate agents
If you employ anyone – in this instance, if you have other estate agents or support staff working for your business – you are legally required to have employers’ liability insurance in case they’re in an accident or their property is damaged whilst at work. The only exception to this is if your staff are immediate family members, or based abroad.
You may also need to protect your office and equipment with buildings and contents cover. If you own your office premises, buildings cover is designed to protect the structure of your building from unforeseen events – a flood or fire, for example.
If you rent your office, your landlord will generally provide this, though you may want to take out fixtures and fittings insurance – perhaps you’ve added a kitchen for your employees, for example.
Whether you own or rent your office, contents and equipment cover will provide protection in the event that your office equipment is damaged, lost or stolen.
You may also want to add legal expenses insurance to cover additional legal costs, and personal accident insurance, which provides financial support if you are injured, or die, at work or elsewhere as a result of an accident. If, for example, you cut your hand on some broken glass during a viewing, this might include hospital costs and loss of income while you are unable to drive or conduct viewings.
Finally, the ability to get to and from viewings quickly is essential for estate agents, and can be the difference between a successful sale and a missed opportunity. That’s why your car is one of your most important assets.
If you use your personal car for work, you’ll need to be covered with business car insurance, which is specifically for journeys from the office to multiple sites or to visit clients. However, if you operate a fleet of company-owned cars, you’ll need commercial vehicle insurance. Cover related to your vehicle will likely need to be obtained separately through a car insurance provider and usually won’t be part of your business insurance package.
» MORE: Business liability insurance explained
Do I need estate agent insurance?
You’re required by law to have employers’ liability insurance if you have any employees. The only exception is if your staff are members of your immediate family or work abroad.
Additionally, it’s worth considering taking out a comprehensive estate agent insurance package that includes professional indemnity insurance and public liability insurance. Claims against your business, especially those involving property, can be extremely costly and could adversely affect your business if you don’t have the funds to pay for this yourself.
Some trade bodies will expect you to have professional indemnity insurance before you can become a member – for example, you’ll need it to join the National Association of Estate Agents (NAEA) or the Royal Institution of Chartered Surveyors (RICS).
» MORE: Do I need business insurance?
What does estate agent insurance cover?
The policies often included in estate agent insurance can cover you for claims made against your business, either as a result of professional negligence or an accident involving a member of the public or employee, and for loss, damage or theft of your property and equipment.
What exactly is covered will depend on which policies you choose to include or not include in your package. You can usually tailor this to match your specific needs.
What is usually included in estate agent insurance?
Estate agent insurance usually includes:
- professional indemnity insurance
- public liability insurance
- employers’ liability insurance
- buildings cover
- equipment cover
- legal expenses insurance
- personal accident insurance
Of course, with many providers you can tailor what is included in your policy to cover what you need.
What isn’t usually included in estate agent insurance?
One type of cover that may not be included as standard in estate agent insurance, but which could be a good idea considering the sensitive data and large payments you deal with, is cyber cover.
Cyber attacks, such as phishing scams, are becoming increasingly sophisticated, and in an idle moment, you could be tricked into handing over private client data or leaving your computer systems vulnerable to further attack.
Cyber cover can compensate you for the loss of business income, as well potential fines that may occur as a result of a data breach.
You may also want to add business interruption insurance, which can protect your company from financial loss if, for example, your office had to temporarily shut for repairs, after a flood or fire.
» MORE: Cyber business insurance explained
How much does estate agent insurance cost?
A huge variety of factors affect the cost of your insurance premium, including your location, number of employees, and claims history.
When deciding how much professional indemnity insurance to take out, imagine the worst-case scenario. Ask yourself: what’s the most expensive mistake you could be sued for?
If you’re advising on the sale of multi-million-pound properties, for example, you may need more cover than someone working with smaller properties.
» MORE: Compare business insurance
Estate agent insurance FAQs
As a small business owner, if you employ anyone then you are obliged by law to have employers’ liability insurance to protect your employees from injury, illness or death as a result of their work. The only exception is if your employees are close family members or live overseas.
You should also consider the value in having professional indemnity insurance, which would kick in if a client accused you of professional negligence, having lost money as a result of following your advice.
Public liability insurance, meanwhile, is worth considering to protect your business in the event of accidents involving the business and members of the public.
Estate agent insurance is not one type of insurance, but rather a term used for packages tailored to the risks faced by professionals who sell and let property.
Although not legally required, professional indemnity insurance can be one of the most important types of cover for estate agents as it covers you in the event that your advice causes your client to lose money or their contract to fall through.
» COMPARE: Professional indemnity insurance
If you use your own car to drive between viewings, you’ll need to be insured under Business Class 1 car insurance. If your business has its own commercial vehicles, they’ll need to be insured under commercial vehicle insurance. These will likely need to be arranged separately to your business protection policies and taken out through a car insurance provider.
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