Agency Risk
Hi All, The below came to me from Kristen Porter from O*NO Legal. I had heard about this issue a short time ago and I thought it worth posting as this may be a different type of risk to what we often think about.
An agent accidentally torched a multi-million dollar property while preparing for an open house, her employer has been ordered to pay over $850,000 in damages – How can you avoid this?
► The house (estimated to be about $3 million) and its contents went up in flames when the agent threw some wayward bedding on a metal shelf underneath an open light, which caught fire in 20 minutes. The owner and the four tenants sued for damages.
► The court found that the agent had actively created the risk of fire and the consequent harm. According to the judge, it is evident that placing or tossing bedding near a burning light could cause a fire. This risk was clearly foreseeable, and the agent should have been aware of it.
► Your goal: to avoid something like this in the future. Provide thorough training to your agents on fire safety protocols, including the risks associated with lighting fixtures and flammable materials. Establish clear written policies and procedures regarding fire safety measures during property preparations, including guidelines on where and how to place items such as bedding. Conduct regular inspections of properties before and after open houses to identify and mitigate any fire hazards.
►You also need to ensure your agency has adequate insurance coverage to protect against potential damages resulting from accidents or negligence. When considering your PI insurance, think about the worst thing that could happen and how much that would cost, that’s how much coverage you should get (burning a house being near the top).