3 Types of Business Insurance Every Real Estate Agent Should Consider
By the very nature of your business as a real estate professional, you are subject to any number of potential lawsuits and claims as a result of carrying out your duties. A small error you innocently overlooked could cost you an expensive and devastating lawsuit.
Below are three insurance policies you should consider to provide your real estate business with the level of protection it needs.
1. Professional liability insurance
As a real estate agent, people depend on your guidance and advice every day. This subjects you to any number of potential lawsuits in the performance of your duties because real estate agents can make mistakes too. Professional liability insurance, also known as errors and omissions, protects you if a client sues you for a number of reasons. Such reasons could include negligence, the cancellation or delay of a sale because of your mistake, or a failure to disclose a material fact.
Expenses from litigation costs alone could crush your real estate business. Since any number of issues pertaining to the sale of a property could bring about a lawsuit, ensure you are adequately protected. Also keep in mind that your general liability insurance typically will not protect you in these circumstances.
2. General liability insurance
This insurance protects your business against liability claims resulting from an injury to a person or damage to their property. For example, if a client visits your office and trips on a rug, gets injured and later sues you, this insurance will provide you with the means to defend yourself against covered claims. This insurance generally also protects you in the event of another person’s property damages and advertising claims, including those for slander and libel.
3. Business owner policy
You should consider a business owners policy (BOP) if you need general liability insurance coverage and have business equipment such as computers, printers, and furniture that you want to protect against physical damage. A BOP provides general liability and business equipment coverage that a real estate agent may need into one package, often at a lower cost than if you bought the policies individually. It could also include property insurance, coverage for your business if you or an employee has an accident with a rented or their own car and crime insurance.
As a real estate agent, these are insurance policies you should consider purchasing for your business. As always, take the time to educate yourself on the specific insurance needs of your business and discuss these with your insurance agent.
The contents of this article and the linked materials do not offer legal, business, or insurance advice related to the needs of any specific individual business. Claim scenarios are for illustrative purposes only and are subject to the terms and conditions of the policy in question. Please consult your professional advisor.
Kevin Kerridge is the director of small business insurance for Hiscox, a company that provides customized business insurance for small business professionals such as consultants, IT professionals, bookkeepers, real estate agents, architects, engineers, and many more.