Real Estate Professional Indemnity Insurance

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Professional indemnity cover not only offers protection for consumers, but it also protects agents – providing financial protection for claims made against agents while delivering their professional services.

From 1 January 2013, it will be mandatory for all licensees under the Property, Stock and Business Agents Act 2002 to have cover of at least $1million for any one claim and not less than $3million in the aggregate for all claims made during the period of insurance.  While the Real Estate Institute of NSW (REINSW) has found that 75 per cent of real estate agents already have such a policy in place, this new Regulation serves to reinforce the best practice standards by bringing into line the few who do not have cover.

The Regulation states that each licensee’s insurance policy must provide coverage for two types of liability:

• Liability arising from any acts or omissions of the licensee that constitute:
o Negligence, or
o Misleading or deceptive conduct, or
o Breach of professional duty, or
o Unintentional defamation, or
o Unintentional interference with intellectual property rights
• Vicarious liability arising from any acts or omissions of an employee, agent or other person engaged in the agency business that constitute:
o Negligence, or
o Misleading or deceptive conduct, or
o Breach of professional duty, or
o Defamation (for which the claimant is not at fault), or
o Interference with intellectual property rights (for which the claimant is not at fault), or
o Fraud or dishonesty by the employee, agent or other person (for which the claimant is not at fault)

The Regulation also implements transitional arrangements so that licensees without any professional indemnity policy have until 1 July 2013 to obtain suitable insurance coverage and licensees insured under an existing policy issued before 1 January 2013 will be deemed to be compliant until that policy expires or until January 2014, whichever comes first.