PAYPROP
Fidelity guarantee Fidelity guarantee covers the insured against criminal acts leaving the clients of the insured firm out of pocket .
Property practitioners offering residential , commercial and industrial rental services deal with lots of rent money and a significant amount in damage deposits , so the risk of sticky-fingered employees is constant . In our experience , you need to keep strict oversight of account permissions , or an employee with too many administrative powers may , for example , initiate and authorise payments , or create fake beneficiaries and pay themselves ( or someone they collaborate with ) on the banking platform .
Similarly , sales agencies holding large client deposits or even taking cash deposits may be vulnerable to allegations of theft or disputes when poor financial controls tempt employees overseeing accounts .
In such cases , fidelity guarantee indemnifies the principal of a property business , as well as all its permanent employees , against damages and legal costs awarded in a claim against them . Professional indemnity cover Professional indemnity insurance ( PI ), on the other hand , indemnifies the insured against damages and legal costs awarded for negligent breach of duty .
For example , think of what can happen when your systems or processes – or those of your service providers – leave your clients ’ personal details or business assets open to theft or compromise .
Professional indemnity insurance covers a property business , its principal and all permanent employees with fidelity fund certificates ( FFCs ) against legal claims for loss or damage resulting from negligent services or advice provided by a property practitioner .
SA Real Estate Investor Magazine JUNE / JULY 2023 74