Plenty of estate agents have been faced with accusations of making a professional mistake. Sometimes, an apology or a little discount can suffice to make the problem go away but what if an unhappy client or a third party starts pursuing a claim of negligence against your estate agency?
When this occurs, it is crucial for estate agents to know how to respond effectively to protect themselves and their business. Professional indemnity insurance for estate agents is not only an industry requirement but also a vital safety net in such situations. This guide outlines the steps estate agents should follow if they face an accusation of negligence or professional error.
1. Acknowledge the Client’s Correspondence
The first step when a client or third party makes an accusation or a compensation demand is to acknowledge their correspondence. Whether it comes in the form of a letter, email, or formal complaint, it is essential to remain professional and courteous. A simple acknowledgement shows that you take the complaint seriously and are willing to address the issue.
However, it is important to limit this response to an acknowledgement only. At this stage, you should avoid going into detail or making any statements that could potentially be used against you later on.
2. Do Not Make Offers or Admit Liability
It can be tempting to try to resolve the matter quickly by offering a small financial gesture, particularly if the issue seems minor. However, this is a serious mistake. Making offers can amount to admitting liability before the situation can be properly assessed.
As a result, your ability to make a claim under your professional indemnity insurance could be damaged. Allow the process to unfold so that your insurer and legal team can assess the situation thoroughly.
3. When To Inform Your Insurers
You should contact your business insurance provider immediately if a client or third party mentions terms like refund, compensation, financial loss, or negligence. Even if the complaint seems minor or unfounded, failing to notify your insurer promptly could jeopardise your coverage.
Early notification is key, as insurers often have specific timeframes for reporting claims. Your insurer will advise you on the next steps and guide you through the claims process. Failure to notify your insurer promptly could invalidate your coverage, leaving you exposed to financial liability.
4. Keep a Written Record
Maintaining a detailed written record of all interactions with the client or third party is essential. From the moment you receive the complaint, document every communication, including the date, time, and content of conversations, emails, or letters. A comprehensive written record will help you track the progress of the issue and provide a valuable timeline should the matter escalate to a legal dispute.
5. Gather All Evidence and Keep It Safe
Evidence is essential in defending against accusations of negligence or professional error. Gather all relevant documents, contracts, emails, and records related to the issue at hand. Ensure that this evidence is securely stored and easily accessible. Having a clear and organised collection of evidence will assist both your legal team and your insurers in evaluating the situation and formulating a defence.
6. Follow the Recommendations of Your Legal Team
Once you have informed your insurer, they will likely appoint a legal team to advise and represent you. It is essential to follow their recommendations closely. Your legal team will have experience in dealing with negligence claims and will provide guidance on how to proceed, including whether to negotiate, settle, or defend the claim in court. Trust their expertise to achieve the best possible outcome.