There are several real estate agencies in Hong Kong that locals and expats use to find their homes/property.
A real estate agency and agent helps sellers and buyer market and purchase homes and apartments at ideal terms and costs. Property agents in Hong Kong provide the services to homeowners, home buyers and renters.
However, the profession comes with risks and unpredictable claims that can ruin the agency or agent’s business. Hence every real estate agency should purchase insurance to cover the financial impact when things go wrong.
There isn’t just one insurance for a real estate agency that covers all; agencies should purchase a range of insurances mentioned in this article.
Top Insurance for Real Estate Agency
Professional Indemnity Insurance
Honest communication is one of the biggest factors when providing real estate agency services. Clients depend on their real estate agents to be reliable and trustworthy when marketing and showing Hong Kong apartments. However, there are situations where a slip of mind or unintentional negligence can lead to lawsuits.
Failure to disclose is the top negligence that can lead to liability lawsuits. The negligence involves a real estate agent not disclosing property defects, negotiation details, hidden costs or failing to communicate vital information before clients sign contracts. For example, a Hong Kong agent fails to disclose the apartment has electrical issues until the contract is signed.
Clients (buyers or sellers) can take action against the agency and agent due to negligence or omission. A real estate agency in Hong Kong needs professional indemnity insurance to cover its liability risks.
The insurance will financially cover legal claims due to property agent negligence, including legal, compensation and settlement costs. However, the insurance will not cover criminal acts such as intentional inflation price cases.
Public Liability Insurance
Real estate agents in Hong Kong are constantly moving from one location to another. They typically meet their clients at their offices, public areas, or Hong Kong property in interest. Meeting clients in the office or outside comes with public liability risks.
Public liability risks could be an injury or property damage due to the Hong Kong real estate business activity. The affected third party may then sue the business for damages and compensation. The claim could be due to a client slipping in the office or an agent causing damage to any property. (The agency will not be liable for injuries during a Hong Kong property viewing as that will be the homeowner’s liability).
These accidents could occur at any point and are unpredictable. Public liability insurance for a real estate agency is another critical policy in Hong Kong. The insurance will cover claims due to third-party injuries or property damage due to business activities. The insurance is crucial even if agents work from home and only meet clients in public.
Cyber Insurance
Every real estate agency has a considerable amount of information on their clients and advertises property online. Most of the data is stored online on servers, which means it’s always at risk of cyber-attacks.
Cybercriminals are always looking for ways to hack real estate companies. Consequently, the real estate industry is always on the radar due to the stored client bank details, personal information and large monetary transitions invoices (between home sellers and buyers).
Cybercrime could occur through phishing emails, malware, ransomware and more. Unfortunately, small agencies do implement enough cyber security, which can lead to unforeseen hacks, data and financial loss.
A cyber-attack can destroy a company financially and create an untrusted brand image if not dealt with professionally. Hence, cyber insurance for a real estate agency in Hong Kong is vital. The insurance will cover cyber experts’ advice, threat removal, data recovery, informing third parties and financial loss. It is an insurance needed by any business that stores data electronically or works online.
Employee Compensation Insurance
Property agencies consist of employees (agents) who try their best to provide the best service on behalf of the company. Every agency is liable for the safety of their employees when they are on duty. Work injuries in the industry can happen at any point, especially when property agents travel from one property to another.
Real estate agent injuries may include car accidents, slips & falls, heat strokes, animal bites (pets) or falling object injuries. These injuries may need serious medical attention and necessary recovery time.
Under Hong Kong employee law, every employee is responsible for paying the work injury medical costs, salary during recovery and compensation (if disabled). Therefore employee compensation insurance for a real estate agency in Hong Kong is mandatory. The insurance will cover the expenses related to work injuries, such as medical bills, salary and compensation. Being a real estate agent may not be the riskiest job, but injuries can occur, and employers must be prepared.
Benefits Of Insurance for Real Estate Agency and Agents in Hong Kong
The combination of insurance is crucial for every real estate agency in Hong Kong. Having the right insurance can be the saving factor when faced with claims, cyber-attacks or work injuries. Each insurance will cover different risks to help the agency deal with the incident.
The main benefit of having insurance is the financial coverage. Dealing with the mentioned risks can be costly and financially damage the business. With financial protection, the agency can focus on defence and moving forward.
Finally, another benefit is knowing there is a safety net when things go wrong. The peace of mind of knowing that risks are covered even before they occur allows experts to focus on their job.
In Hong Kong, insurance benefits property agencies and agents in the constantly growing real estate industry. With increasing risks, it is crucial for companies to stay protected with insurance.
To Learn More about real estate insurance and protect your real estate agency in Hong Kong & Asia, contact Red Asia Insurance.
