This warning was issued by Thomas Winter, the specialist insurance brokers for the Private Rented Sector.
Writing in the June issue of Agreement, the ARLA magazine, Thomas Winter director John Hornsey says that over the past year there has been a significant increase in the number of claims that allege agents have been negligent in the management of properties.
Insurers and their solicitors highlight two persistent weaknesses in the working practices of letting agents. They are easy to put right and this could help to keep insurance costs down in the future.
The two problem areas are lack of detail in inspection records and vagueness in explaining the extent, frequency and scope of inspection visits. This is weak documentation and it often makes defence of PI claims more difficult and more likely that it will take a payment to settle the claim.
“This is a waste of money as insurers are often satisfied that the agent has carried out duties and responsibilities satisfactorily but then they lose in court for lack of properly documented evidence,” John Hornsey explained.
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He said that a review of systems, to take the insurance risks into account, will help to construct defences against claims. “It will also help to cut the frequency of claims now that so many are encouraged by the ‘Sue Culture’, as seen on TV in No Win, No Fee advertising. More careful risk management will also help every agent’s bottom line by keeping down the cost of Professional Indemnity Insurance premiums.”
