Professional Indemnity Risk Exposures for Real Estate Agents & Strata Managers

Financial Lines specialist Paul Marques explains PI Exposures to look for when dealing with Real Estate Agents and Property Managers. With the ever-growing need to carry and hold Professional Indemnity Insurance, the following sheds some light on the exposures faced by real estate agents involved in property management, as well as property managers and strata managers.

What is the typical role of a property manager, strata manager?

• Real estate agents and property managers act as the Landlords representative in selecting tenants, collecting rent, organising and overseeing the physical upgrade, and maintaining the properties they manage.

• Strata managers are involved in coordinating the affairs of body corporates including conducting meetings, collecting and banking levies, advising on asset management, placing insurance and keeping financial accounts. Although it may seem that strata managers are providing more of an administrative service they too are responsible for the coordination and arranging maintenance of a property itself and its common areas to ensure it is safe for its tenants and its visitors.

What are the Professional Indemnity Risk Exposures?

Like most professions, an Insured has a duty of care that is owed to their clients so it comes as no surprise that bodily injury and property damage claims can occur from maintenance not being arranged in a timely manner or arranged at all. When it comes to proving that maintenance was arranged in a timely manner, poor record-keeping has been one of the biggest issues in being able to defend an Insured.

Some of the common claims faced by property and strata managers can include;

1. Allegations to an Insured (who was the acting managing agent) failed in its duty to adequately take precautions to ensure a safe environment for a tenant who slipped on cracked tiles leading to an injury (e.g. a fractured arm or injury to their shoulder); and
2. Proceedings taken against an Insured due to serious bodily injuries sustained from a tenant leaning against a ground floor handrail at the top of a staircase. The claimant falling 1.5 metres due to the railing becoming detached due to its poor condition.

Do your Clients Need PI Cover?

At Berkley Insurance Australia, we strive to find PI solutions for our clients. With the recent increase in claims within this industry, we have seen rate increases across our portfolio. Nonetheless, we believe it is vital for real estate agents, property managers & strata managers to consider taking out Professional Indemnity Insurance. Our local team of Underwriters are always willing to discuss these risks with you.

Berkley Insurance Australia is a registered business name of the Australian branch of Berkley Insurance Company (ABN 53 126 559 706). Berkley Insurance Company is authorised by the Australian Prudential Regulation Authority as a general insurer to conduct new or renewal business.

The information and opinions contained in this document are general in nature. You should consider what insurance is appropriate for you or seek independent insurance advice.

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