They say insurance is a grudge purchase – until you need it. Then it’s an absolute godsend.
That’s why we’re pleased to share that our preferred financial services provider, I Am Sure, is launching a new insurance product tailormade for property practitioners. Find out why your business needs the next-level protection it provides – and how you can be one of the first to benefit from it.
Worth every penny
Real estate agents know better than anyone that it can be feast or famine out there – and right now, few are feasting. At times like these, it’s tempting to avoid any expenses that don’t offer immediate or direct return on investment (ROI).
But what if the pay-off is immediate, and it’s called peace of mind? How much is it worth to you to be able to carry on doing business when fraud, negligence or external meddling can leave you liable for vast amounts in legal claims and fees?
No business owner would deny the value of being able to sleep at night, knowing they’ve done everything they can to take care of their shareholders, staff, clients and their own professional reputation and peace of mind.
Whatever boxes you’re ticking to stay on the safe side – data security, disaster recovery or business cover – it’s all insurance against the unforeseeable. In return for a low monthly rate, you can get business survival and personal indemnity against major losses, no matter what.
What uninsured practitioner wouldn’t trade out of such a desperate position, if they could?
Managing other people’s money – what can go wrong?
According to the Association of Certified Fraud Examiners’ 2022 report on fraud, organisations worldwide are losing $4.7 trillion to occupational (employee) fraud each year, with real estate leading the pack as the industry with the highest median losses.
Why is that?
Real estate businesses are unique among non-financial institutions and intermediaries in that they deal with large and/or frequent in- and outflows of client money (sales deposits and rental monies), and so they’re highly vulnerable to negligence or criminal actions – within or outside the business.
In this economic and trading climate, can you afford to risk your business’s reputation? Luckily, insurance products including fidelity guarantee and professional indemnity insurance can help.
Property rental agencies (residential, commercial and industrial) deal with lots of rent money and a significant amount in damage deposits, so the risk of long-fingered employees is constant. In our experience, you need to keep strict oversight of permissions, or an employee with too many administrative powers may for example initiate AND authorise payments, or create new beneficiaries AND pay themselves (or someone they collaborate with) on the banking platform.
Similarly, sales agencies could hold large client deposits and may even take a cash deposit occasionally, leaving the agency vulnerable to allegations of theft or disputes.
In such cases, fidelity guarantee indemnifies the principal of a property business, as well as all its permanent employees, against damages and legal costs awarded in a claim against them.
Professional indemnity cover
Often referred to as PI insurance, professional indemnity insurance indemnifies the insured against damages and legal costs awarded in a claim against them for negligent breach of duty.
For example, think of what can happen when your business systems or processes – or those of your service providers – leave your clients’ personal details or business assets open to theft or compromise by third-parties such as hackers or saboteurs.
Professional indemnity insurance covers a property business, its principal and all permanent employees with fidelity fund certificates (FFCs) against legal claims for loss or damage resulting from negligent services or advice provided by a property practitioner.
A fidelity fund certificate isn’t enough
Many property practitioners believe an FFC covers them against internal fraud or negligence, but it’s subject to several conditions and procedures that aren’t widely known or factored in by most agencies.
Did you know:
- The maximum amount that can be paid to a claimant by the Property Practitioners Regulatory Authority (PPRA)’s fidelity fund per cause of action is just R2 000 000?
- The PPRA may only consider certain claims, and must hold an inquiry each time a claim is lodged?
Before it does so, it must ensure:
- the claimant has already laid a criminal charge with the SA Police Services;
- the claim complies with all legal requirements and due process was followed; and
- the claimant substantiated their claim with proof, including records of civil action already taken against the property practitioner.
With so many hurdles to clear, relying on an FFC to indemnify your business significantly decreases your chances of recovering from a claim, or the remedy might come too late to undo financial harm to the business.
And here’s something else to consider: The PPRA may, in the public interest, arrange any group insurance scheme with any insurer to cover property practitioners’ liability to members of the public on the grounds of malpractice.
So why wait?
Get comprehensive business insurance before it’s too late
At PayProp, we are always thinking of innovative and affordable new ways of protecting property practitioners’ best interests. Although we've got your back in terms of our services, we know that many other things could go wrong in a business like yours. So, we reached out to a group of reputable insurance experts to provide cover for those aspects not already taken care of by us.
Our preferred financial services provider, I Am Sure, has launched a new, tailormade insurance product for property practitioners – and PayProp users can claim an exclusive discount!
AgentSure is a comprehensive business insurance solution that combines fidelity guarantee* and professional indemnity insurance*, tailor-made to protect SA property practitioners against internal and external wrongdoing as well as breach of duty – in a single policy.
Available to all individual and business property practitioners across South Africa, this new policy offers comprehensive, affordable risk protection by brands trusted for their impeccable credentials and expertise.
To find out more about Agent Sure, join our free online launch on Wednesday 22 February at 10:00am SAST.
*Underwritten by King Price
**Underwritten by iToo