What is a breach of client confidentiality?

A breach of confidentiality for a letting or estate agent is when information or data is provided in confidence by a client and is disclosed to someone outside the firm without permission.

Although most breaches of confidence are made by mistake rather than deliberately, if a client has a financial loss because of the breach, they can act through the courts to claim compensation.

Professional indemnity cover for letting and estate agents is designed to offer comprehensive cover when this happens.

What is a breach of client confidentiality?

Guarding against breach of confidence

A breach of confidence can arise in several ways for a letting or estate agency business:

  • An employee can have a laptop or tablet giving access to sensitive business data stolen
  • Someone can email property sale price negotiation information to a developer instead of a seller before an offer is accepted
  • Failing to make sure rented homes have the correct licences and safety certificates prior to letting

A policy of keeping business in the office is a good place to start a confidentiality policy as someone can easily eavesdrop a public conversation over lunch or coffee.

Breach of confidence compensation claims cost property professionals hundreds of thousands of pounds each year, with only a few claims reaching the court.

A dispute with a client can quickly damage a professional reputation that has years to foster, while a financial claim can seriously impact on cash flow and the profitability of a business.

Keeping confidential information secure is a professional and ethical requirement.

What is a breach of client confidentiality?

Setting confidentiality policies

Every letting or estate agent should have policies in place to protect client confidentiality as they are in a special relationship with both buyers and sellers that could place them in a conflict of interest.

This includes observing the requirements of data protection laws and instilling good business practises with staff.

Draw up a confidentiality policy and make sure staff read and sign the document. Cover points such as managing data and identifying clients before disclosing information on the telephone or face-to-face.

Other steps include:

  • Setting password permissions on technology, folders and documents
  • Controlling access to shared resources, such as paper files and email boxes
  • Encrypting data on removable drives
  • Gaining client permissions to share information

Professional indemnity cover and breach of confidentiality

In some cases, a breach of confidentiality can be settled with an apology, but clients are increasingly resorting to legal action.

Professional indemnity insurance for letting and estate agents can remove a lot of the stress of a claim.

The policy will cover specialist advice, legal costs and any compensation paid out. It gives peace of mind that if the worst should happen, the business and clients are protected.

Call Hamilton Fraser on 0345 310 6388 or email info@hfprofessionalindemnity.co.uk for a bespoke professional indemnity policy designed with the agent in mind.

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Premiums start from £12.60* a month

* Based on £100,000 worth of cover. Plus insurance premium tax (IPT) currently at 12%.