As a real estate agent, you’re always taking care of your clients' needs and valuable property – but what about your own? Insurance for your assets and operational liabilities should be a key consideration as you head into a new year to ensure that you are protected from the unexpected. Here are the types of policies you should consider in relation to your risks when assessing your business needs for the coming year.
General insurance
There are a range of general insurance policies that are typically held by real estate businesses and agents. Take the time to consider how the following are relevant to the risks you face.
- Professional indemnity – An essential insurance policy providing protection against claims of negligence or breach of duty allegations made by a client, along with legal costs associated with defence against claims from an act, omission or breach arising from professional advice or services.
- Cyber liability – Insurance that can help protect a business, and recover losses and associated costs resulting from large-scale breaches, business interruption, ransomware and other types of cyberattacks. A cyber insurance policy can be an extremely valuable risk transfer tool for every business.
- Commercial motor vehicle – Your car is an important asset used for your daily activities, and it’s important to protect your vehicle in the event of an incident (for example, accident or theft) and to cover your legal liability for damage to a third-party caused by your vehicle. Cover options available consist of three types of policies (i.e. comprehensive, fire and theft, or third-party property damage only).
- Workers’ compensation insurance – Workers’ compensation insurance is mandatory in all Australian states and territories for employers. If you’re an independent contractor, you may require your own insurance. If you’re a sole trader, you are unable to cover yourself as an “employee” by workers’ compensation insurance. In this circumstance, you’ll need to consider your own personal accident/sickness and disability insurance. Rules vary between states and territories, so if you’re in doubt, check with the relevant regulator/workers’ compensation authority for requirements. Marsh does not arrange workers’ compensation insurance in those States where there is a government scheme and provides only consultancy services in those States.
Business insurance
If you have business assets, such as a building, contents and equipment, you should consider business insurance. Additionally, this type of insurance (or sections contained therein) typically forms part of a tenancy lease agreement.
While business insurance policies do vary between different insurers, following are the typical sections covered under this product type.
- Material loss or damage – Physical loss or damage to your business assets (e.g. building, contents and stock) at your premises from certain sudden, unexpected or unforeseen occurrences or perils such as fire or storm damage. Flood cover is typically excluded from standard products.
- Business interruption – Loss of income to your business as a result of material damage to your property and can assist with additional increase costs of working.
- Glass – Costs for replacing internal or external glass that is accidentally damaged or broken such as windows (including advertising signs).
- Burglary – Loss of your contents and stock due to theft from forcible and violent entry to your premises.
- Money – Your business’s money while on your premises and in transit.
- Broadform liability – ‘Public Liability’ protects your business against the legal costs where a third party (e.g. a customer or member of the public) sustains property damage and or personal injury as a result of your business operations and negligence. ‘Product Liability’ protects your business if you sell, supply or deliver goods and the product causes injury, death or damage.
- Machinery breakdown – Mechanical breakdown of machinery equipment at your premises such as air-conditioning or refrigeration equipment.
- Computer electronic equipment – Breakdown of electronic equipment at your premises such as photocopiers and computers.
- General property (special risks) – Loss or damage to portable property such as laptops, iPads and mobile phones.
- Employee dishonesty – Loss of money or contents caused by theft, fraud or dishonesty by your employees.
- Tax audit – Accountants fees in connection with an audit of your business conducted by the Australian Taxation Office.
- Transit – Loss or damage to goods and stock that your business buys, sells or uses while they are in transit in a vehicle owned or operated by you.
Management liability
While professional indemnity insurance covers the advice or service you provide to your clients, management liability insurance covers the act of running your business. A management liability policy will protect your business and personal assets against legal costs for allegations of mismanagement, misconduct or legislative breaches.
Want to find out more?
This is not an exhaustive list of insurance policy considerations. For information about what insurance is right for your business, talk to a Marsh broker by calling 1800 990 312.
Helpful hints
1. Dare to compare
It's never been more important to review your insurance in detail, making sure the limits of cover and current claims excesses match your business requirements and transfer of risk objectives.
Best practice is to ensure, at a minimum, that you conduct an annual review of your risk profile and loss control measures. Ensure the limits of cover match the current state of your operations, assets and company structure, and that the elected sums ensured are adequate. Also determine if there is a business tolerance for a higher claims excess to generate some premium relief.
2. Good claims performance
Among other rating factors, insurers primarily use claims performance in determining the overall premium. It’s recommended that a business incorporates strong risk management practises to mitigate the likelihood of avoidable claims.
It’s also a good idea to obtain a formal claims experience history report and ensure your broker has finalised any open or recoverable claims; if not, they could be counted in the insurer’s premium calculations.
3. Be careful not to compare insurance solely on premium
The price of your insurance plays a big role when comparing different policies. However, business owners should consider completing a side-by-side comparison of the available options before making their decision.
The last thing any real estate agent wants is to be caught out with a policy that doesn’t cover their business for the risk exposures if an accident was to occur.
4. If in doubt, check it out
Renewing any insurance policy for your business is an important decision and can sometimes mean the difference between being covered for a specific risk or not. If you have questions that can’t be found online or in a brochure, give your insurance broker a call to ensure you thoroughly understand the insurance solution on offer.
5. Start early
It’s imperative that you commence reviewing your insurance requirements at a minimum of 6-8 weeks before the expiry date of your insurance renewal.
DISCLAIMER
Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) (“Marsh”) arrange the insurance and is not the insurer. This publication contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire the product, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh on request. This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage.
The Real Estate Institute of New South Wales Limited (ABN 51 000 012 457) ("REINSW") is an Authorised Representative of Marsh for the purpose of promoting the Realcover products to members of REINSW.
LCPA 23/457