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Professional indemnity insurance – risks and premiums on the up

As agents struggle to conduct their businesses in the crisis, more PI claims – and hikes in premiums – seem inevitable.

Sheila Manchester

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Prior to the COVID-19 outbreak, many estate agents already experienced a rise in PI Insurance premiums with insurers reacting to events such as the Grenfell tragedy. It seems reasonable to conclude that property professionals could expect more hikes due to COVID-19.

Link to Staff Training featurePaul Offley, Compliance Officer for epropservices, parent company of The Guild and Fine & Country, says that PI Insurance is included in their membership fee – for many other agents, PI insurance typically ranges between 0.15% and 0.5% of turnover, depending on risk factors and market competition. He adds that estate agents can mitigate increases to premiums by adhering to a robust risk management strategy, which will effectively reduce the possibility of a PI Insurance claim.

Legislation is legislation

“It is important that agents keep focused on their legislative requirements and even in the current ‘stay at home’ environment we are able to demonstrate due diligence. “

In difficult times, while authorities are asked to take a pragmatic approach to enforcement – legislation is legislation. Some will use this to their advantage thinking that an agents’ ‘guard may be down’ and there will be people who, once life returns to normal, decide to bring a claim for one reason or another,” he warns.

“We have launched a virtual compliance assessment programme, run over 12 months and designed to educate and test on all existing and new legislation – in short, it offers a firm a strategy for compliance. Take up has already been excellent with 56% of Membership signed up,” says Offley.

Time for training

The organisation is also using this time to offer virtual branch training courses with Microsoft Teams, which can be accessed from anyway. They are being taken up by teams who have been furloughed to keep their knowledge up to date. The courses are interactive and the best alternative to being in a formal classroom training environment. “While furloughed staff are not able to work, they can still partake in training sessions to ensure that, once this crisis is behind us and they are reinstated, they will be fully up to speed with any policy or legislative that seems to change daily,” says Offley.

He advises that doing the right thing and treating all customers fairly and with respect is paramount in raising standards in our industry.  “Legislation is not about preventing business activities but about making sure business is completed in the correct way and that you are able to demonstrate the actions you take,” Offley concludes.

Read our guide to indemnity insurance.

 

April 9, 2020

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