It’s not easy to run a profitable estate and letting agency. Rightfully, both buyers and sellers anticipate that you are the expert, and most of the time, you will be. However, nobody is flawless, and even the most careful estate or rental agent can make errors. This is why the demand for professional indemnity insurance Malaysia is getting more popular.
Fortunately, there are ways to protect your company against any mishaps you may experience by purchasing professional indemnity insurance. Here, we’ll look more closely at professional indemnity insurance and explain why your company needs it.
- What is the price?
- Why is it necessary?
- Where do we go to purchase professional liability insurance?
- Backing up your reputation
- What is protected?
- Examples of assertions
What is the price?
Depending on the standard risk variables and market competition, professional indemnity insurance rates for estate and renting agencies typically range between.15% and.5% of turnover. Of course, rates can vary from this depending on the job done, the history of claims, etc. Because there is no history or legacy to insure, new start enterprises receive cheaper rates.
Additionally, keep in mind that minimum premiums, which can differ greatly between insurers, will also be necessary. Depending on the insurer chosen, a minimum premium can be RM 500 or RM 1300. The insurance industry’s entry-level premium for covering any risk is the minimum premium.
Please fill out a Quote Request form or call us at website: Hanhan for a competitive quote.
Why is professional indemnity insurance necessary?
Naturally, no estate or rental agent ever has the intention of giving incorrect counsel. But regrettably, mistakes might occasionally occur.
Sellers, buyers, landlords, and tenants who are dissatisfied may file a lawsuit against your company in an effort to obtain compensation, complain to a property ombudsman, your professional organisation, or even the local media.
According to a Deloitte poll, loss of revenue was cited as having the biggest effect on a company’s operations by 41% of respondents who had encountered a reputation risk event. Therefore, it’s imperative to take all necessary precautions to safeguard your company’s financial stability in the event that you commit any costly mistakes. This entails purchasing a professional indemnity insurance policy to make sure that you won’t be responsible for paying any potential legal costs, which can total thousands of pounds.
Where do we go to purchase professional liability insurance?
The majority of businesses use an insurance broker to arrange their PI insurance; a reputable broker reduces the cost of the premium while also offering helpful guidance and support throughout the policy period, particularly with regard to claims. Please get in touch with Hanhan for a quote or some free advice since we offer a comprehensive broker service.
Using our quote and buy system, you can also buy online if your fee income is less than RM10million. It immediately compares the rates charged by a few significant insurers.
Backing up your reputation
The professionalism of estate agencies is also becoming more and more of a focus. Many people are demanding for licencing of sales and letting agents, and there is never-ending media condemnation of “rogue agents.” In fact, a lot of tenants now demand that their renting agents belong to a professional organisation like the NAEA or the RICS, both of which require professional indemnity insurance to join. Additionally, all agents must join an independent redress programme like The Property Ombudsman, which once again requires professional indemnity insurance for agents to join.
What is protected?
Although professional indemnity insurance is crucial for any estate and letting agent’s reputation and financial stability, you must make sure the coverage you choose is comprehensive.
A thorough professional indemnity insurance policy ought to protect you against:
- The National Approved Letting Scheme and The Property Ombudsman’s awards compensation
- Regulations from 2008 on Consumer Protection from Unfair Trading
- Defense expenses, including those for attorneys, experts, and other court fees. In addition to the policy limit, they are due.
- claims brought against you because of a civil obligation
- Payment up to the selected policy limit
- Claims made against you due to the destruction or loss of documents
- Costs of data protection defence
Therefore, before you sign anything, make sure your policy complies with the standards of the major professional organisations for estate and letting agents, including the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA).
Examples of assertions
The agent allegedly undersold a property. It was resold for twice as much five months later. Payment: Rm10 million.
An employee of the company changed the cheques’ amounts and phrasing to give him access to the money. Payment: RM 2.6 million.
The agent suggested that a client hold an auction to sell a farm. Later, the customer claimed that if the land and buildings had been sold separately, a greater price could have been reached. The sum paid was RM2.2 million.
The agent allegedly listed a house for sale even though it wasn’t requested. The cost was RM2.1 million.
The agent placed a client’s home on the market after giving it a value of over RM 2.6 million. The customer bought two houses in the hopes of a rapid sale. But because the house was overpriced, it took a long time until it was sold for a much lesser sum. For the price of bridging finance and other expenses incurred as a result, a claim was made. sum paid of RM1.5 million
To negotiate a rent review, an agent was hired, but no early number could be reached.
Rent had to be increased for tenants. Payment: RM 36 million
The renter of a farm received a notice to vacate. According to the Agriculture (Miscellaneous Provisions) Act of 1976, the company was given a deadline to serve a counternotice but failed to do so. sum paid of RM 3.9 million
The insured restored a clay roof with concrete tiles while overseeing a client’s residence. It was necessary to seek planning approval because the property was a listed structure. The clay tiles had to be reinstalled, per the municipal authority. The cost was RM 1 million.
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