“You don’t know what you don’t know.” It might sound like an off-hand statement, but it is really at the heart of why real estate professionals should partner with an insurance broker to help them protect their businesses.
The risks facing real estate businesses are diverse and insurance can be complex, which is why engaging the services of a broker who understands the intricacies of the industry (including relevant legislation and best practice) makes good business sense.
When you work with a broker who has experience in helping businesses throughout the spectrum of the
industry – from individual agents selling residential property to commercial property specialists, from PMs with small to extensive rent rolls to multinational franchises – you can tap into their expertise, in-depth industry knowledge and, importantly, their insurance networks.
That way you get the right policies – and competitively priced too. You might even find that your broker can offer you policies with negotiated wording and pricing that you wouldn’t be able to obtain on a one-off basis.
Most real estate professionals are aware of the mandatory insurances needed as part of their licences. Public Liability, Professional Indemnity or Workers’ Compensation insurances, for example, are usually compulsory.
Principals and business owners often don’t think twice about taking out Professional Indemnity insurance, as well as insurance to cover their office, equipment and liability.
But there are some logical risks that are often ignored, such as business interruption.
A tip for agents who operate from a home office: make sure you check your home and contents cover, as you might find that the policy is void if you operate a business from the premises.
A specialist broker will delve deeper into your business operations to truly understand the unique risks your business faces and then suggest ways to mitigate those risks. Being adequately covered by taking out the basic policies you think you need does not necessarily equate to really protecting your business.
A broker’s experience in working with the industry translates as a real understanding of how real estate businesses operate. That means the broker knows the risks common to these businesses across the spectrum.
Individual agents (sales and property managers) and SMEs commonly need:
- Professional Indemnity (the best are tailored, industry-specific policies)
- Public Liability/Broadform Liability*
- Property* (building and contents) or Business/Office
- General Property* (for portable devices)
- Business Interruption*
- Motor Vehicle
- ravel (domestic and international)
- Cyber Liability
Larger businesses – corporations, listed companies – or specialist operators such as management rights may also require:
- Director’s & Officers’ (D&O)
- Commercial Legal Expenses
- Management Rights
- Trade Credit
- Accounts Receivable
- Fidelity Guarantee (theft by employees)
- Strata Building
- Umbrella Liability
- Statutory Liability
- Employment Practices Liability
- Trustees Liability
- Audit & Investigation
- Loss of Money
- Loss of Fee Income
A full risk assessment by your broker may reveal lesser-known risks that need to be addressed. For example, did you know that Remotely Piloted Aircraft Systems (RPAS) cover is available for agents and their contractors who operate drones? Or that you may need Worker’s Compensation insurance if you employ someone to deliver your flyers to letterboxes?
It’s not just business coverage that your broker can arrange. If you use a brokerage that employs financial planners, you can also arrange personal covers like income protection or life insurance.
Armed with all the information they need, your broker can negotiate the best possible terms and conditions – as well as premiums – for the risks you choose to transfer to an insurer.
Of course, another advantage in working with an insurance broker is that they not only take care of all the paperwork – putting policies in place, renewals and so on – but they also step into the fray at claims time.
In true Murphy’s Law style, you’ll need to make a claim at precisely the worst possible time;
You are on the only holiday you’ll get all year, you are attending an interstate or international conference, you have more showings to attend than a fashionista during fashion week, the office is short-staffed, you have a slew of inspections to carry out and maintenance to organise… Your broker, who is on your side, will manage the claims process for you so you can get on with everything you need to do to keep your business running.
The role of an insurance broker is not just to sell you insurance policies, suggesting you take out every conceivable cover without knowing the risks you face and the potential consequences for your business. Their role is to partner with you to truly understand your business and the real risks you face on a day-to-day basis in an ever-changing industry and world.
When you work with one account manager or client relationship executive supported by a great in-house team, including legal counsel who can guide policyholders through complex claims and review the insurance aspects of contracts, tenders and leases, your broker really does become a natural extension of your management team.
If you partner with the right insurance broker you can trust that they know what you need to know about insurance – so you don’t expose your business, your reputation and your livelihood to unnecessary risks.
*EBM’s OfficeCover is designed exclusively for real estate professionals and provides cover for these and more.