Small real estate business owners have multiple activities and people competing for their attention at any given moment. From making new business connections to managing staff and handling clients, time is not something many small business owners have to spare! So when it comes to protecting your business, it may be a challenge to find the time to read up on your business insurance facts in order to make informed purchasing decisions.
Thanks to the convenience of the Internet, you can get information in seconds. However, most of the myths small-business owners come to believe about business insurance are perpetuated online, too. So how do you tell fact from fiction and make sure you're adequately protecting your real estate business? Read on to discover the most common business insurance myths, and the information you need to set the record straight.
Real Estate and Title Business Insurance Myths Busted
As the owner of a real estate business, title agency, or property appraisal business, you work tirelessly to grow your company and help your clients own a piece of the American dream. And chances are, you don't want your hard work to be jeopardized by a liability lawsuit or property damage claim. That's why it's important to base your business insurance purchases on accurate information. When an incident occurs, you will have the appropriate coverage in place to handle the unexpected costs.
Read on to learn the truth behind these common myths about business insurance so you're prepared to protect your business no matter what comes your way.
Real Estate Business Insurance Myth #1: "I'll close my doors if I'm ever faced with a lawsuit."
Whether your business is still open to the public or closed for good has little bearing on the fate of your company if you are liable for wrongdoing. So if your real estate business is ever sued and the court finds you liable, closing your doors doesn't mean you aren't collectible. If you simply don't have the funds to pay the settlement or judgment, your personal assets could be seized to make the payments.
To protect your business's bank account — and your personal account — from such a scenario, make sure you have adequate business protection that can fund the costs of your defense and any settlements awarded. You don't need millions of dollars in assets to require this kind of planning — just a desire to survive an unexpected financial hit!
Real Estate Business Insurance Myth #2: "I maintain open lines of communication with my clients. I don't have to worry about being sued."
Every successful business model includes a strong customer relationship strategy. However, good relationships with your clients and open communication lines can only take you so far. After all, you can only control your own actions. But what happens if a client refuses to work through a problem with you? What if they are so upset about an investment you oversaw that they only want to blame your business? Because you only account for half of the equation, you can count on your Professional Liability policy to cover your business if your client chooses to take their grievances to court. And if your real estate business is truly at fault for a wrong your client suffered, your policy will be there to fund your legal defense, settlement costs, and other related expenses.
Real Estate Business Insurance Myth #3: "I don't need an insurance policy — my real estate business is too small."
No matter the size of your business, you always benefit from taking business protection measures. That way, no matter what curveballs you encounter down the road, be it a liability suit, tornado damage to your office, or employee injury, you will have the insurance policies that keep you from experiencing devastating financial losses. It's helpful to consider that natural disasters and fires don't discriminate based on the size of your business. They wreak havoc on big and small businesses alike and can cost you millions of dollars in damage and lost assets. With proper protection planning, however, your Property Insurance policy can ensure you have the means to replace your gear and make repairs without leaving your real estate business broke.
Real Estate Business Insurance Myth #4: "No business insurance policy fully protects your business, so why bother?"
While it's true that each policy has its own exclusions and areas of coverage, some coverage is better than none at all. Business protection planning is not an issue of all or nothing. These days, you can find business insurance policies that will cover the full cost of settlements, attorney's fees, and court costs — so long as your limits are high enough. To boot, most of these policies are more affordable for small-business owners than they have ever been. And when you work with a trusted agent, such as the agents at insureon, you can receive the coverage you need to protect your business — no gaps, no extras.
Real Estate Business Insurance Myth #5: "My employees don't face many risks. I don't need Workers' Compensation coverage."
Even in the relative safety of a real estate business office, accidents can happen to anyone at any time. At the very least, know that your employees can develop repetitive motion injuries if they work in the office all day. If your real estate agents show property, they can face assault risks, especially if they visit after hours. If your employees suffer work-related ailments and injuries, the cost of the medical expenses could be your financial responsibility. Your employees could also sue your business for not providing a safe work environment.
Workers' Compensation Insurance shields your real estate business from these costs and ensures your company complies with state laws. Most states currently require any business with employees to carry the coverage.
Real Estate Business Insurance Myth #6: "My Umbrella policy will cover me if anything happens."
The name can be misleading: Umbrella Liability Insurance is not a catchall coverage. In fact, it has plenty of limitations and exclusions. For example, the coverage is used to extend the limits of your General Liability and Employer's Practices Liability policies. It cannot, however, increase the limits of your Professional Liability policy. To be sure you're receiving the appropriate coverages, always read over your policies and make note of what it does and doesn't cover.
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