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15
Nov

Top Tips for Aussie Real Estate Agents Choosing Insurance

Being a real estate agent comes with a fair share of risks. Think high-value transactions, complex regulations, market volatility, and even working alone, meeting strangers in empty properties.

That’s why having the right insurance is essential.

This article is about how the right cover can help protect your business and livelihood from potential legal disputes, financial losses, and unexpected accidents.

Public Liability Insurance is Protection from Accidents

Public liability insurance is another key policy for real estate agents. This policy comes into effect if a client or third party is injured, or their property is damaged during your
business activities.

Public liability insurance would help cover the legal costs and compensation you’re ordered to pay. This coverage protects you against potentially high legal and damage costs.

Explained: Business Insurance Cover

Business pack insurance works as a one-stop shop for protecting your real estate business. By bundling several types of insurance into one policy, this pack provides you with comprehensive coverage.

Real estate agents typically include the following insurances in their packs:

  • Professional indemnity
  • Public liability
  • Property damage
  • Motor vehicle insurance
  • Cyber insurance
  • Business interruption insurance.

Cyber Insurance is Now a Modern Necessity

The adoption of electronic commerce in real estate transactions boosts the risks of fraud, theft, information security breaches, and lack of trust.

With cyberattacks on the rise, particularly in the property sector, it’s crucial to protect your business from potential:

  • Data breaches
  • Phishing scams
  • Ransomware attacks.

Increasingly, cyber insurance is becoming a necessity, especially for real estate agents handling sensitive client data. This type of policy can cover the costs of cybersecurity issues, helping you get back on track swiftly.

Underinsurance has its costs

Underinsurance threatens business livelihood. This can happen if a claim exceeds the limits of your policy’s coverage. You’ll be out of pocket for the difference, potentially meaning devastating financial fallout. That can happen if there’s a significant public liability or professional indemnity claim.

As your broker or adviser, we’re here to regularly review your policies with you so you have peace of mind.

Real-Life Scenarios

Example 1:A real estate agent neglects to inform a buyer about significant plumbing issues in the home, which they were aware of but did not disclose. After purchasing the property, the buyer incurs substantial repair costs due to the hidden defect. The buyer could claim negligence for the agent’s failure to disclose this information.
Example 2:The real estate agent knows that the house is located in a flood-prone area but fails to disclose this information to potential buyers. The buyer later suffers extensive property damage during a flood. The agent could be held liable for negligence for failing to warn the buyer about the foreseeable risk.
Example 3:A real estate agent represents both the buyer and the seller in a transaction without adequately disclosing this conflict of interest. The buyer later discovers that the agent prioritised the seller’s interests, resulting in the buyer overpaying for the property. The buyer may claim negligence or misconduct, arguing that the agent failed to act in their best interest.
So, insurance is not a luxury but a necessity for real estate agents, and Professional Indeminity cover is mandatory in some states. Your policies should be customised to meet your unique business needs.

 

Article Supplied by OneAffiniti

Photo by AndreyPopov  on Unsplash

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