Going, going, gone: Don’t let professional indemnity risk ruin your business

18 Jun 2018
EAC
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When you’re focused on racing to property inspections, managing tenants and negotiating contracts, professional indemnity risk is probably the last thing on your mind. But the reality is that these everyday real estate scenarios can expose you to risks that could lead to a compensation claim – causing financial and reputational harm to you personally, and to the business you’ve worked so hard to build.

Despite your best efforts to provide a quality service to your clients, the reality is that mistakes can happen. It’s therefore important to be aware of the risks involved with your line of work, so you can put steps in place to help avoid them and ensure that you’re protected with the right insurance cover.

The top risks facing real estate professionals

  • Misrepresentation: Disputes arising when the purchaser feels they have been misled by advertising – such as describing a property with 4 bedrooms (instead of 3 + study).
  • Mismanagement: Rental property mismanagement claims occurring when a Landlord incurs costs due to a loss of rent or damage to property – this could be due to a tenant skipping town without paying their rent, or causing malicious damage to their rental property.
  • Employment Practices Liability: EPL claims arising from outgoing or current employees. These can be very costly – proven Unfair Dismissal claims can lead to payment of up to 26 weeks salary, and claims relating to bullying, underpaying and sham contracts are uncapped.
  • Personal injury: Claims arising from a client or employee being injured at your workplace or anywhere you do business, including property inspections and auctions.

How can you prevent falling victim to a claim?

While it’s important to be aware of the risks impacting your professional practice, it’s even more important to be diligent and put steps in place to avoid or minimise them. We’ve compiled some tips to help minimise some of the most common real estate risks:

  • Complete thorough and regular property inspections with supporting documentation and photos
  • Implement electronic systems to ensure timely follow ups of properties and maintenance
  • Ensure the accuracy of advertisements by vetting the wording and accuracy of information supplied by vendors or Landlords
  • Implement policies, training and procedures for staff including social media and email policies
  • Be proactive to staff matters involving bullying or harassment, and seek immediate advice from your broker or Insurer if an issue arises

Protect your finances, your business and your livelihood

Even if you implement all the risk minimisation strategies, accidents and mistakes can still happen. That’s where Professional Indemnity insurance can act as a safety net to provide protection from the costs associated with any claims (including legal costs and any damages awarded). With cover options tailored to the unique requirements of real estate professionals, Professional Indemnity insurance provides peace of mind and security – so you can keep focusing on what you do best.

We’re by your side

To learn more about minimising risk or to discuss your insurance coverage please contact Aon on 1800 466 894.


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Aon is the approved insurance partner for EAC. You can now save on your premiums while protecting your own business through their professional indemnity and office contents insurance, while also look to grow your revenue through their Landlord insurance distributor program.

To obtain Aon insurance services call 1800 456 610.

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