Client Money Protection (CMP) is possibly one of the least understood protection schemes currently available in the UK Property market. All firms operating within the Private Rented Sector in England and Wales are required by law to hold a government approved CMP scheme membership.
Whilst it was the intention initially for mandatory CMP regulation to extend to firms operating within the Property Management sector, the advisory work completed by our Chief Executive, Rob Mayo and Dr Nigel Glen, Chief Executive of The Association of Residential Managing Agents (ARMA) helped to highlight the core differences between Property Managers and firms operating within the Private Rented Sector – An average letting agent holds around £500,000 of client money whereas an average Property Management firm holds in excess of £6M.
The schemes currently available are all known as “levy schemes”. These schemes effectively pool the premiums paid by members in order to pay any claims from other members. This works well within the PRS as claim amounts tend to be relatively small however one claim from a Property Manager could cost the premiums paid by all members of a levy scheme fund. Add to this that some of the existing schemes provide cover for firms with multi disciplines and it could be a firm operating in a different sector that reduces the cover for other members due to a large claim.
Insurety Limited are the only UK broker to have designed a bespoke CMP policy to UK based Property Management firms. Although our policy does automatically provide cover for firms operating within the PRS, those firms MUST have their primary operation within block management. Our scheme is based upon each individual firm and not a pool therefore meaning that each member pays a premium based upon their individual risk and is not affected by the claims of other members.
Please contact Rob Mayo at Insurety Limited on 01242 323432 or email: email@example.com