The PII product, which has already been made available to Let Alliance’s letting agents, has been designed specifically to provide cover for breaches of the CPR statute, and is now available to all property agents across the UK.
On 1 October 2013, the Property Misdescriptions Act 1991 was repealed and replaced by CPR, which will have wide-ranging implications for all estate agents and lettings agents. In particular, the act legislates about agents’ responsibility to disclose ‘material information’ to potential buyers and tenants and therefore leaves agents vulnerable to a range of accusations and possible conflicts with their clients, which could result insignificant financial losses.
The issue of disclosure is extremely subjective according to Custodian Insurance. The company believes the three key phrases within the legislation are ‘material information’ to an average consumer’ that could effect a ‘transactional decision’ – but making a judgment on how and when to disclose information is not clear cut.
Zahid Naqvi, Managing Director, Custodian Insurance said:
“It’s early days - the legislation is open to interpretation and has only been tested in court once. However rightly or wrongly, the UK is very much a litigious society, with consumers only too aware of their right to redress or financial compensation. Property agents would be wise to scrutinise their existing policies to understand whether they would be covered in the event of a potential claim against them under the new ruling. The balance of power has ultimately shifted to the hands of buyers it’s no longer a case of ‘buyer beware’ but ‘agent aware’.
Naqvi continued:
“Professional Indemnity Insurance does not only pay out in the event of a full claim but it also covers property agents for damages and legal defence costs should a client make a claim against them – whether accurate or completely unfounded. Whilst the Beresford Adams ‘mineshaft’ case, was eventually thrown out, significant costs would have accrued during the legal battle.
Having fully comprehensive professional indemnity protection in place gives business owners and managers complete peace of mind, should an individual bring a case against them under CPR, or other piece of legislation.”
As well as providing cover for claims under the new CPR legislation, standard features of the Custodian Insurance Professional Indemnity Insurance product for estate agents, includes Ombudsman awards; Data Protection Act costs up to £250,000; loss of documents up to £250,000; prosecution defence up to £500,000; dishonest acts of (former) employees and/or partners and directors; and its civil liability wording goes beyond the average negligence based wording of similar products. The policy is underwritten by Axa Inusrance UK Plc.
For more information please visit:
www.custodianinsurance.co.uk/products/insurance-for-estate-agents
