Archive for the ‘REAPI’ Category

Eagle Insurance Brokers are ‘all insurance’ brokers with specialists in Professional Indemnity (particularly for the real estate sector) and business insurance. Print out this page, fill in your details and fax back to 02 6584 9645 or email david@eagleinsurance.com.au with your details to enter the draw.

Professional Indemnity insurance has become more prevalent over recent years as litigation has been widened to capture more professions. Even some professionals that have not purchased PI insurance before,  now find themselves having to buy cover to satisfy contracts.

The protection that PI provides has moved from a litigation defence mechanism to a consumer protection device which enables businesses to more effectively continue to grow without the heavy pressures of paying for a mistake that staff make.

It is obvious that a sole trader has ultimate control over their business, should they start to employ admin staff to assist them run the business, they still have their finger on the pulse.

It is when the business starts to get larger and staff are employed to run or manage certain aspects of the business, like sales or property management, that the issue of errors occurs.

Certainly when the business becomes a large employer with multiple staff in these areas it now calls for more control, more procedures and more supervision.

When buying Real Estate Agents Professional Indemnity (REAPI) you should understand what the insurer is looking for to establish if you can do anything different to buy a better policy or obtain a better price.

LOOKOUTS
Here are a few LOOK OUTS that you should be aware of which are quite simple to engage within your business:

1. Do you have independent contractors working within your business?
Are they included in your policy? Unless you tell someone they won’t normally be covered.

2. Are you a member of the REI or similar professional organisation?
Insurer’s love to see that Agents get regular up to date professional information.

3. Do you have too many sales and not enough admin staff?
The insurer will look to see that you can complete the business you start and not create issues from a lack of administration.

4. What qualifications and experience do your principals have?
New to operating a business or an industry stalwart.

5. Do you undertake Business Broking / Sales activities?
There are some insurers who will not provide cover for this, even if you tell them, which leaves you exposed.

6. Have you stopped an income activity in the last few years?
Make sure if you change insurers that your new policy will accept your past activities. Make sure your new insurer knows about your past activities.

7. Do you manage Shopping Centres?
There is a higher risk of being dragged into “slip & fall claims” by the shopping centre insurer.

8. Do you undertake regular education programs?
Continual professional development is important for every industry.

9. Do you use a complaints and repairs register?
This is your defence mechanism against someone alleging you were informed of an issue. You can prove use of a chronological reference for your defence.

10. Do you manage properties that your business partner, family or employees hold an interest in?
Most PI policies have a “Conflict of Interest” exclusion.

 

As you can see, some simple risk management techniques can be employed in your business to ensure you remain a good risk to insure.

This list is by no ways exhaustive as there is always more that you can do so you. REAPI (Real Estate Agents Professional Indemnity) provides protection against a civil liability where a financial loss has been imposed upon a third party.

Due to the nature of the Real Estate business the policies were widened to include protection against “bodily injury” and “property damage”.

Prior to the Tort Law reforms a few years ago there were plenty of situations where ridiculous claims were being made and Real Estate Agents were being dragged into the action and having to defend themselves.

As much as Tort Law reform has cleaned up a lot of these frivolous claims there are still claims happening in the industry but suffice to say, not as much as 5 years ago.

This has had an obvious impact upon the premiums that the insurers are charging as well as other factors like increased competition.

Ensure that you speak to a broker who is a specialist in handling REAPI (Real estate Agents Professional Indemnity) as it’s all about the policy conditions when a claim happens not about the price that you paid for the policy.

You don’t want to be the most disappointed person with an insurance policy, so make sure its right.