No matter what or when, compliance in real estate is always important.
But even good systems can’t eliminate every mistake – which is why agencies should also review whether their insurance protection still reflects today’s risk landscape.
A quick refresher on the AML/CTF obligations
The expanded AML/CTF obligations came into effect on 1 July 2026 and now apply to many real estate businesses across Australia.
Under the new rules, many real estate businesses must develop an AML/CTF program that outlines how they’ll identify and manage money laundering risks.
This includes verifying clients’ identities, carrying out due diligence on higher-risk transactions, keeping accurate records, training staff, and reporting suspicious activity to AUSTRAC, Australia’s financial intelligence agency.
Compliance failures can have a serious knock-on effect
Now that agencies have developed an AML/CTF program and have begun to embed these processes, maintaining consistency across every transaction becomes just as important as understanding the rules themselves.
However, a compliance slip-up or administrative error can have impacts beyond regulatory consequences.
A documentation error or breakdown in internal procedures could contribute to client complaints, disputes or allegations that an agency failed to meet its professional responsibilities.
These situations may also place pressure on management, disrupt day-to-day operations and damage client confidence.
Building good compliance habits
Meeting your AML/CTF obligations doesn’t stop once policies are in place. Ongoing compliance depends on building consistent processes that staff follow every day.
Here are a few practical ways to strengthen your agency’s approach.
Build stronger internal processes
Clear and consistent procedures are the foundation of effective compliance.
Develop standard onboarding processes for every client, use verification checklists so important steps aren’t missed, and create documented workflows that staff can easily follow.
It’s also worth establishing clear escalation pathways for situations that seem unusual or require further review.
Train your team
As your team becomes more familiar with the new requirements, regular training and refresher sessions can help keep everyone following the same processes.
Make sure staff understand how to recognise unusual transactions, know the agency’s internal reporting procedures and are familiar with documentation requirements.
Keep detailed records
Good record keeping is essential for demonstrating that your agency has followed the appropriate processes.
Maintain clear records of client conversations, identity verification steps, decisions made throughout a transaction and any supporting documentation collected.
Comprehensive records not only help ensure consistency across your agency, but can also provide valuable evidence if questions arise about how a transaction was handled or why particular decisions were made.
Insurance as part of compliance and business resilience
By now, many agencies will have updated their AML policies and procedures.
The next step is making sure your broader risk management strategy has kept pace.
That’s why it’s worth reviewing your business insurance alongside your compliance framework.
Professional Indemnity insurance
As compliance responsibilities increase, so too does the potential for claims arising from the professional services your agency provides.
Alleged administrative errors, incorrect advice, documentation mistakes or other oversights could result in disputes with clients or allegations of negligence.
Professional Indemnity insurance protects real estate agents against losses claimed by a third party due to alleged or actual negligence in your professional services or advice.
Subject to applicable limits, a Professional Indemnity policy covers compensation payable to a third party together with your defence costs (which can include legal costs, investigator costs, and expert fees).
Management Liability insurance
For agency principals and business owners, the AML obligations also introduce additional governance responsibilities.
Managing compliance systems, overseeing employee processes and meeting statutory obligations all form part of running a well-managed agency.
Management Liability insurance protects directors, officers, and the insured business from many risks relating to the management of a business.
Owners and those responsible for the management of a company have specific responsibilities which can result in personal liability for alleged or actual wrongdoing.
Cyber Liability insurance
Enhanced client verification also means agencies are likely to collect and store more sensitive information than ever before, including proof-of-identity documents such as passports and driver’s licences, and financial records.
Real estate agencies are already tempting targets for cybercriminals.
This increase in data collection could only make them more attractive.
Cyber Liability insurance can help you manage many types of cybercrime (like cyberattacks, ransomware, and data breaches) by covering legal costs, data recovery, fines and penalties, and other expenses related to the cyber event.
Preparing for the future
While strong processes, staff training and clear documentation will go a long way towards helping agencies meet their responsibilities, it’s equally important to think about how your business would respond if something doesn’t go according to plan.
Reviewing your insurance alongside your compliance preparations can help ensure your agency is protected against a range of everyday business risks.
With BizCover, you can compare insurance quotes from leading Australian insurers and purchase cover online in minutes, making it easy to find insurance that suits your business.
This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording or Product Disclosure Statement (available on our website). Please consider whether the advice is suitable for you before proceeding with any purchase. Target Market Determination document is also available (as applicable).
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