Real Estate Agents are among those who market themselves as being experts, or at least skillful, in their field. In this sense, they can be regarded as professionals. Being persons who market themselves as experts or possessing special skills, people may rely on their advice as such. Thus, the law requires that caution must always be exercised in giving out advice such that an agent must always stay within the expertise or skill expected for real estate agents. Notwithstanding the exercise of caution, however, real estate agents may still commit mistakes as humans are prone to. This is when suits may arise and a real estate agent may be required to pay for damages, loss, or injury that the court may order. Hence, it is advisable for agents to secure real estate professional indemnity insurance.
Professional Indemnity Policy
An agent may secure a Professional Indemnity Policy. This policy is designed to protect the professional’s assets in case a claim arises. Such protection is to ensure that the professional will be able to continue in operation of the business despite such claim. This type of policy will be helpful in making sure that one’s hard-earned assets and sources of income do not suffer in case of lawsuits.
Claims Made and Notified Policy vs. Occurrence Policy
Insurance may be based on two kinds: Claims-Made or Occurrence. In a Claims-Made policy, it is required that the insured must notify the insurer of any and all claims, fact, circumstances or situation that may potentially lead to a claim. Such notification must be given within the period of the insurance except if there is a retrospective cover. In which case, the risk insured against may occur at any time. It is also required that the insured is not aware of the fact, situation, or circumstance prior to the period of insurance. On the other hand, an Occurrence policy, the fact, situation, or circumstance must arise only during the period of insurance although the insurer may be notified at any time subsequent to the happening of such fact, situation or circumstance.
Best Practice: Thorough Discussion
Before you take on insurance, however, it is the best practice for all professionals to discuss the insurance thoroughly with the insurer or his/her agent. While discussing, it is also wise for the professional to make inquiries on matters that are not clear or on possible scenarios that may arise or may have previously been experienced and how the insurer may or may not be able to address the same. As has always been reminded even to the best of us, caution must always be exercised when getting your real estate professional indemnity insurance.