Real Estate Insurance
Business and Liability Insurance for Real Estate Professionals
Real estate professionals — whether they're a commercial agent, independent realtor, or an appraiser — help their clients navigate the intricate world of real estate. This work isn't without its risks.
Many realtors protect their company by investing in small business insurance that covers the cost of lawsuits, theft, and other basic business risks. By working with specialists in real estate agent insurance, you can be sure to get coverage that's designed for your industry.
Insurance Options for Landlords / Property Managers, Home Inspectors, Real Estate Agents, Appraisers and Other Real Estate Professionals
Insureon's agents specialize in real estate insurance and customize insurance packages to cover lawsuits and financial risks that are likely to hit realty companies. If you have a question about your insurance, our agents will be able to answer it quickly and help you get the most from your real estate E&O Insurance, General Liability, or other policies.
Below, you'll find a list of policies our agents can tailor for real estate companies and an explanation for how each coverage works.
General Liability Insurance
General Liability Insurance for Real Estate Professionals
You may only consider the possibility of facing lawsuits about issues with unsatisfied buyers, but you also have basic liabilities for bodily injuries, property damage, and reputational injuries. General Liability Insurance helps cover the cost of these third-party injury and property damage lawsuits.
Say you're taking a potential buyer on a walkthrough when the buyer trips on the stairs, tears the handrail from the wall, and breaks her hip as she tumble to the floor. You could be sued over her injuries and the damage to the property. General Liability Insurance can pay for lawyers' fees, settlements, and damages. GL can be purchased on its own or bundled, often at a lower cost, in a Business Owner's Policy.
Real Estate Errors and Omissions Insurance
Real estate Errors and Omissions Insurance (Professional Liability Insurance) helps protect realty companies from the cost of a lawsuit when a buyer claims you were professionally negligent, violated NAR standards, or committed other oversights.
Say a buyer's home drops in value years after you sold them the house. The buyer files a lawsuit against you — unfairly claiming you overstated the value of the home and inaccurately represented its potential to increase in value. Even if the lawsuit is meritless, it could burden your company with thousands of dollars in legal bills and waste your time. With real estate E&O, you can rest assured that your insurer can help cover your legal costs and help you fight the case.
Other common lawsuits that may be covered under E&O include disputes if you fail to close, botch local regulations, or forget to advise clients about potential problems with a property.
Business Owner's Policy (BOP)
Business Owner's Policy (BOP) / Property Insurance for Real Estate Professionals
A Business Owner's Policy bundles Property Insurance and General Liability Insurance, giving real estate agents access to two basic insurance policies at a lower premium.
Property Insurance can reimburse your business for damages and losses caused by fire, theft, vandalism, and some weather events. If a fire incinerates your office, your insurance could cover the cost to replace furniture, electronics, supplies, and other property your realty business owns.
It's worth pointing out that Property Insurance can only cover the commercial property that your agency owns. It won't reimburse you for damages to clients' property. However, if a client sues you for damaging their property, your General Liability may be able to cover the lawsuit.
Given its bundled coverage, the BOP offers a wide range of liability coverage for realty agents. For this reason, many low-risk small-business owners sign up for BOPs.
Workers' Compensation Insurance for Real Estate Professionals
Real estate agencies might be legally obligated to have Workers' Compensation Insurance in order to fulfill state requirements for employers. Workers' Comp (sometimes called Workman's Comp) can offer financial protection for the cost of workplace injuries and accidents.
Say an employee is showing a home when he slips on a newly waxed floor and breaks his ankle. As his employer, you'd be legally required to cover his medical costs and some lost wages for any time he is unable to work. Workman's Comp can pay for these costs.
Umbrella Insurance for Real Estate Professionals
Realty businesses may be able to get extra lawsuit protection by signing up for Umbrella / Excess Liability Insurance, which may pay for lawsuits after they exceed the limits of General Liability, Hired and Non-Owned Auto Liability, and Employer's Liability coverage. By signing up for a $1 million Umbrella policy, you may be able to enjoy additional coverage on multiple business insurance policies.
It is important to note that Umbrella Insurance benefits cannot be applied to E&O Insurance limits.
Cyber Liability Insurance
Cyber Liability Insurance for Real Estate Professionals
Often called Data Breach Insurance, Cyber Liability Insurance can cover the cost to fix and respond to cyber attacks and data breaches. Why would your realty company be the victim of cyber crime?
Cyber criminals are known to steal private data to sign up for credit cards, apply for mortgages, and commit other kinds of identity theft. If your network is hacked, Cyber Liability Insurance can cover the cost to investigate the breach, repair it, offer credit monitoring to your clients, and contact affected parties.
Auto Liability Insurance for Real Estate Professionals
With you and your agents traveling to various openings and walkthroughs, Commercial Auto Insurance can offer you important coverage in case someone from your company is in an auto accident. If you're in an accident, Commercial Auto Insurance can help pay the damages you owe the other driver and potentially cover lawsuits.
Because Personal Auto Insurance might not cover accidents that happen while you're driving for work, it's important to review your policy and talk with an insurance agent to see if you need Commercial Auto coverage.
Lessor's Risk Insurance for Real Estate Professionals
Also called Landlord Insurance, this policy offers protection for people who lease 25 percent or more of a property. In addition to offering compensation for damage to the landlord’s premises, this policy may be able to provide coverage for customer property damage. In most cases, though, renters still need to carry their own insurance as well.
Commercial Property Insurance for Real Estate Professionals
This policy may offer compensation for damage caused by wind, fire, theft, and certain other events. Real estate professionals who operate a small or low-risk business may be able to bundle their Property coverage with General Liability in a BOP.
Tips for Real Estate Professionals: Get it in Writing
To be a real estate professional, it helps to be an affable person. That means you're good at chatting with clients, talking them through issues, and delivering on your promises. While you're comfortable talking with buyers and sellers, don't forget that it's important to document things in writing.
Prevent miscommunications and lawsuits by documenting all discussions, sending follow-up emails to clients, having client sign Seller's Disclosures, and using contracts that outline what your services do and do not include.
Watch out for Real Estate E&O Lawsuits
No one wants to be saddled with a lawsuit. They can take years to resolve and can cost thousands of dollars in lawyers' fees and other costs. Real estate agents need to be careful to avoid E&O disputes and have insurance to cover the cost of these cases.
Stay up-to-date on the realty code of ethics and professional standards and err on the side of over-communicating with clients. Follow our risk management blog, Real Talk about Real Estate, to learn more.