Everything You Need to Know About Real Estate Insurance
Great real estate insurance is a combination of multiple other great insurance policies. Take a look at some essential coverage you need as a real estate agent...
Professional Liability Insurance
Professional liability insurance isn’t one to miss if you’re a real estate agent. You’re more exposed to error and omission lawsuits, malpractice, and negligence claims than most other professionals. It will protect you when your buyers or sellers file claims against you.
Imagine you’re selling a property that is situated in an area that’s susceptible to flooding. You don’t know this detail, so you don’t mention it to your buyers, either. After making the sale, your buyers sue you for not informing them properly while making the sale. Of course, this comes under a negligence claim, and your professional liability insurance coverage will protect you.
Business Owners Policy (BOP)
A business owners policy protects businesses from losses due to damage to assets and third-party liabilities. A BOP is a bundle policy consisting of commercial property and business interruption, as well as general liability insurance.
A real estate insurance agent will include a BOP in your insurance package to provide maximum coverage at a minimal price. A BOP will cover the following risks for your business:
Lawsuits filed over loss or property damage
Copyright infringement
Damage to business property
Lawsuits filed over loss or property damage
Copyright infringement
Damage to business property
Commercial Property Insurance
Commercial property insurance covers commercial property from damage due to listed perils such as theft, fire, and natural calamities.
If your business owns or leases office buildings, then commercial property insurance is a must. For example, if your building catches fire, commercial property insurance will cover your losses.
Commercial Auto Insurance
Commercial auto insurance is as the name suggests; it protects your company’s business vehicles. As a real estate business, you may need a company car to take your customers to the land/property you’re trying to sell. Make sure you purchase liability insurance, collision, and comprehensive coverage, as well as medical expenses covered under your policy.
General Liability Insurance
General liability insurance protects a business from third-party liabilities arising due to the operations of the company. Usually, general liability insurance is one of the first policies a business would buy. The coverages of this insurance include bodily injury, personal damage, as well as property damage.
This policy is covered in realtor insurance to protect you from legal fees or loss due to client injury.
Business Interruption (BI) Insurance
As the name suggests, business interruption insurance helps to cover losses when your business needs to temporarily shut down.
This policy will cover losses and expenses—such as employee wages and lost business income—when your agency cannot function due to damage to the property. For example, if your building catches fire and your employees cannot conduct meetings with clients in the office, this might lead to loss of business income. BI insurance can help get businesses back on their feet.
Errors and omissions (E&O) Insurance
E&O insurance for real estate is a specific type of professional liability insurance that covers real estate agents against claims of negligence, bad advice, and insufficiency.
According to HG.org, the following are the most common reasons that real estate agents get sued:
Breach of contract
Negligence
Failure to disclose
Failure to advise
Agencies are liable for their agents’ actions. For example, an agent from your company could be sued for negligently failing to disclose that the property was the site of a grisly murder. In this case, you are responsible for getting your agent out of the situation. E&O insurance for real estate agents comes to your rescue in this instance.
Commercial Cyber Insurance
Commercial cyber liability insurance covers losses arising from cyber risks as well as liabilities. Online data has a high risk of theft and misuse. This policy is for all businesses that deal with sensitive data online.
A report by IBM shows that, on average, companies lose approximately $3.86 million from a single data breach. Hence, cyber liability insurance is essential to indemnify a business from such huge losses.
Workers Compensation Insurance
Workers compensation insurance is only handy if you have multiple employees. Your company must protect your employees in case of injuries, liabilities, and damage during work hours, or while they’re in the workplace.
For example, a property you’re listing needs some upkeep. You get contractors to come and make some changes. While at work, one of the employees trips and falls down the stairs. Their injuries will need medical attention, and you’re the one paying for all of it. With workers compensation insurance, you won’t need to worry about most of the bills.
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is also only warranted if you’ve got employees working for your business. Basically, EPLI protects you in case of any unwarranted lawsuits from your employees regarding discrimination, sexual harassment, breach of contract, and wrongful termination.
Of course, there are many violations it won’t cover, but unless you’re the worst boss of the year, EPLI will protect you. This policy allows employers to focus on their company’s growth regardless of what troubles follow them.
