New insurance policy for agents sued in CPR cases
Wednesday 16th October 2013
Agents have been warned that purchasers could prove to be extremely litigious following the repeal of the Property Misdescriptions Act and its replacement by the Consumer Protection from Unfair Trading Regulations.
EAT warned earlier this month that lawyers could have a field day, because CPR mean that agents – both letting and sales – have a duty to disclose information about a property:
Unfortunately, as our story pointed out, there is no universal agreement as to exactly what should be disclosed and when, meaning that what an agent does disclose is largely a matter of personal judgement.
With criminal penalties including large fines and imprisonment, there is also concern that property sellers and landlords are jointly liable with agents.
An insurance firm, Custodian Insurance, has now come up with a new Professional Indemnity product designed specifically to cover agents against breaches of CPR.
The PI product has already been made available to Let Alliance’s letting agents, and is now available to all property agents across the UK.
Zahid Naqvi, managing director of Custodian Insurance, said: “Rightly or wrongly, the UK is very much a litigious society, with consumers only too aware of their right to redress or financial compensation. Property agents would be wise to scrutinise their existing policies.
“The balance of power has ultimately shifted to buyers: it’s no longer a case of ‘buyer beware’ but ‘agent aware’.
“Professional Indemnity insurance does not only pay out in the event of a full claim but it also covers property agents for damages and legal defence costs should a client make a claim against them – whether accurate or completely unfounded.
The policy is underwritten by Axa Insurance UK Plc.
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