In this preview of her Transform coaching session, Sharon Fox-Slater of EBM RentCover talks about insurance to consider in your real estate business, protecting yourself from cybercrime, and shares some effective tips for risk management.
Sharon: I’m Sharon Fox-Slater, Managing Director of RentCover, underwriting agency EBM Insurance.
Q. How are some principals under-insured?
Sharon: Generally, it’s well-known in the industry, and in some states, it’s actually mandatory that you have professional indemnity insurance. So, there is a perception out there that professional indemnity is the only sort of insurance that you need for your business, but in fact, the risk of running any business, whether it’s real estate or general, is far, far greater than that. So, our role out there in the marketplace with our real estate clients is actually to provide the education around the right sort of insurance and where your risks are.
Q. How can principals protect themselves from cyber crime?
Sharon: So, the first thing would obviously be to have a cyber policy. There are all sorts of things that are available at the moment. It’s a relatively new risk to the market, so it’s important to obviously have an insurance broker who can actually come in, have a look at what you’re doing, look at the size of your business, and determine what level of cyber cover you need. If you are in the unfortunate situation where you get attacked, the insurer will actually work side-by-side from you from the minute that that happens, right through to, if required, will even actually pay the ransom to free up your database. So, having that sort of protection and just even someone to go to for the support and advice through a horrific experience is very important.
Q. What are some lesser known risks to be wary of?
Sharon: Probably, it’s to do with property management and the professional indemnity side of it. A lot of people think that the professional indemnity purely relates to sales. That’s what you hear a lot about in the marketplace, but the bulk of claims that we see actually come about from property management practices. Not necessarily poor practice, but perhaps not necessarily noting exactly what’s gone on, perhaps not emphasising the extent of the risk back to a landlord. Lots of property managers suddenly find themselves caught in the middle of a situation where they feel that it’s the landlord’s responsibility, but there’s been a part played by the property manager, and there’s not much discussion out there about that sort of thing.
Q. What is vendor management insurance?
Sharon: So, vendor management insurance will actually cover you in the event that your accounts department or trust accountant pays an invoice that is not legitimate. All companies obviously pay vendors, and obviously, you’d like to think that you’re paying things that are above board, but people have the ability, unfortunately, to sometimes get in there and change the details of who you’re paying. So, you actually get insurance to cover you so that if you find that, unfortunately, an invoice has been paid, the insurance would reimburse that for you.
Q. What is best practice for insuring a business?
Sharon: The good thing is to have a really good relationship with a broker who understands your business. You can go directly to insurance companies and get insurance yourself. The concern with that is that you don’t know what you don’t know, so you don’t know what you should be insuring. If you call up an insurance company, they’ll answer your questions and they’ll give you a quote, but what they won’t do is provide that full risk analysis. So, your broker will actually tell you exactly where all your risks are. You can elect not to take the cover that is suggested, but at least then you’re aware of it. In the event of something going wrong and a disaster, your broker will actually then work with you, work with the insurer and ensure that your claim is dealt with as quickly as possible. It just provides that added peace of mind that you’ve got a professional working with you to protect your business.