What is Professional Indemnity Insurance?
Professional indemnity insurance protects Real Estate professionals if they are found negligent or in breach of their professional duty. This is important, as if a third party like a client or customer claims your services or advice has caused damages, injury, or loss, you can be subject to hefty legal costs.
What does Professional Indemnity Insurance cover?
Professional indemnity insurance policies cover your business against mistakes and breaches (whether they are founded or not), as well as the cost of legal fees, claims of damages, investigation, and, in some cases, defending your business’ advice and conduct.
According to the new RERA regulations, Real Estate Professionals are advised to enter into a Professional Indemnity Insurance Scheme. This includes:
- Brokers (including insurance cover for sales agents employed/contracted by such brokers)
- Property Managers
- Owners Association Managers.
A Professional Indemnity Insurance scheme provided to a company will cover all those engaged in the relevant activity.
What is the Minimum level of Professional Indemnity Insurance cover?
The minimum level of cover requirement is 250,000 BHD.
Scenarios & examples
A few indicative scenarios for the different service providers are provide with indicative figures only. Premiums will be based on a range of factors including number of employees, value of business transactions, turnover and other risk factors.
Real Estate Broker
A broker with 4 sales agents with cover of 250,000 BHD will pay an estimated annual premium:
- 500/- with an excess of BHD 2,500/- each and every loss.
A company employing 8 Valuers with cover of 1 m BHD will pay an estimated annual premium:
- 1,300/- with an excess of BHD 5,000/- each and every loss.
A company with 6 property managers with cover of 250,000 BHD will pay an estimated annual premium:
- 750/- with an excess of BHD 2,500/- each and every loss.
Owners Association Manager
An individual with cover of 150,000 BHD will pay an estimated annual premium:
- 450/- with an excess of BHD. 2,500/- each and every loss.
The above rates are only indicative terms and are subject to each company Reinsurance terms and conditions.
You can find a table of all members of the Bahrain Insurance Association (BIA) that can provide appropriate schemes for the Real Estate Professionals here.