Measurement standard · duty to disclose · valuation
Professional indemnity insurance (BAV) for a self-employed estate agent
The best-known claim against an estate agent is about square metres. A floor area stated too generously in the brochure is a measurement error with a price tag that comes straight to you.
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Deze pagina in het Nederlands: Beroepsaansprakelijkheidsverzekering voor een zelfstandige makelaar.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
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- We compare the offerings of several insurers
- An adviser checks whether the cover suits your activities
- We arrange the switch, including cancellation
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
A self-employed estate agent sells information and judgement. If that information turns out to be wrong, the loss to the buyer or seller is financial: paying too much, a defect that only appears after completion, a zoning designation that makes the intended conversion impossible. That is pure financial loss and professional indemnity insurance is intended for it; how the product works is set out on the hub page on the BAV. The standard is the care of a reasonably acting estate agent, with the duty of care for engagements in Article 7:401 of the Dutch Civil Code as its basis.
Three categories of mistake recur. The first is measurement: the usual starting point is a measurement report in line with NEN 2580, and anyone who measures themselves or takes over an old figure is in a weak position as soon as the buyer measures again. The second is the duty of disclosure: known defects, contamination, foundation problems, easements or a pending objection procedure have to be in the file. If the seller conceals something and you should reasonably have noticed it, you are drawn in through Article 6:228 of the Dutch Civil Code on mistake. The third is the public law context: zoning, permit requirements, listed status, ground lease conditions and whether an extension was ever lawfully permitted.
When you apply, watch your business activity. Acting as an agent and valuing are not the same risk: in a valuation you give an opinion of value that a lender relies on, and many policies cover that only if 'valuer' is included separately. If you also do buying agency, letting agency, rental management or property surveys for an insurer, have those stated as well. Work on your own property portfolio is not a service to a client and falls outside the cover.
This page deals with one situation. The full overview is on Compare professional indemnity insurance (BAV).
What the discussion is about in an estate agency claim
Four points that determine whether a claim against a self-employed estate agent is covered.
Measurement standard: the brochure is your evidence
A figure in square metres is read as a statement a buyer may rely on. A disclaimer in small print does not change that. Work with a measurement report in line with NEN 2580, keep the measurement sheet and state which rooms were and were not counted as floor area. Without that report your defence is in effect your memory.
Valuing is a different professional capacity
A valuation that comes out too high affects not only the buyer and the seller but also the lender. If 'valuer' is not on your policy schedule, you are carrying out work outside your insured professional capacity and a claim about it can be rejected. Also note the requirements that the validation institute and your registration set for supporting evidence, comparable properties and the inspection report.
Your commission and remedial work are not insured
Refunding your commission, drawing up a brochure again or repeating a survey are your own costs, not insured losses. What is covered is the loss arising in addition to your client or the other party. Also, fines and penalty payments, for instance for a missing permit or a breach of the obligations under the Wwft (the Dutch anti-money laundering act), remain outside every liability policy.
Intent, warranties and promises
Deliberately incorrect information is excluded; Article 7:952 of the Dutch Civil Code keeps loss caused by intent outside the cover. A warranty or promise of a result you give yourself, for instance about an achievable sale price or about whether a conversion can be permitted, is also an obligation you enter into by contract. Liability accepted by contract that goes beyond what the law imposes is excluded as standard.
What does your premium depend on?
- Annual turnover from commission: the usual basis for calculation
- Share of valuation work: valuations weigh more heavily than agency work
- Type of objects: homes, commercial property or agricultural
- Value of the properties handled: determines the size of a possible claim
- Membership of a trade association: standard terms and a disputes procedure reduce the risk
- Retroactive period: cover for transactions from earlier years
Insurers weigh these details differently. That is where your saving is.
What is covered
| Situation | AVB | BAV |
|---|---|---|
| You do not report an easement and the buyer cannot build the extension he planned | No | Yes |
| After completion the dormer window you mentioned in the brochure turns out never to have been permitted | No | Yes |
| You forget to include the finance condition in the purchase contract | No | Yes |
| After a forced sale a lender is left with a shortfall on a property you valued | No | Provided that |
| Your advertising board blows off the facade onto a neighbour's car | Yes | No |
| An administrative fine after your client due diligence under the Wwft turns out not to have been in order | No | No |
A fine is a penalty imposed on you and not someone else's loss. It always stays at your own expense.
Frequently asked questions
This is what people ask us most.
The seller concealed a defect. Am I liable as well?
You can be. The buyer sues the seller for non-conformity under Article 7:17 of the Dutch Civil Code, but often also turns to the estate agent with the allegation that he should have asked further questions or should have noticed the defect. Your defence stands or falls with your file: the completed questionnaire, your own observations at the survey and whether you questioned the seller specifically about what you saw.
How long can a buyer still bring a claim against me after completion?
Longer than the term of the engagement. A claim for damages is time-barred under Article 3:310 of the Dutch Civil Code five years after the injured party becomes aware of the loss and of the liable party, with an outer limit of twenty years. Because the BAV works on a claims-made basis, the moment of the claim counts. If you close your practice, buy run-off cover before you end the policy.
Is damage during a viewing insured?
No, not on the BAV. A visitor who falls, or a floor damaged through your actions, is injury or damage to property, and that is a different product. For that there is liability insurance for self-employed professionals. Watch the care, custody and control exclusion there: keys and a home you hold temporarily call for separate attention in the conditions.
Do I work under a franchise policy or do I have to insure myself?
If you work under the banner of a chain or a partnership, the question is whether you are within the class of insured persons on that policy and whether your own engagements fall under it. Ask for written confirmation with a reference to the policy provision. See also professional liability for an estate agency for the office variant.
Read more
Within Beroepsaansprakelijkheidsverzekering
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