Your Guide to Business Insurance for Real Estate Agents
As a real estate agent, you barely have time to grab a cup of coffee in the morning before you run out the door to an open house or closing meeting—let alone worry about insurance coverage. But while you jet between your main office, client properties, and title company, you face several risks that can threaten your financial future.
Buying the right coverage is crucial if you want to keep serving clients for years to come, but it’s not always easy to tell when a policy is optional or essential. Keep reading to learn about the business insurance for real estate agents that nearly every company in the industry needs.
What Types of Insurance Do Real Estate Agents and Brokers Need?
Whether you employ a team of real estate agents or work as a self-employed independent broker, you probably need some—or all—of the following business insurance for real estate agents.
Realtor Liability Insurance
Your main office may seem like a ghost town most days, but your business still faces liability risks on and off the premises. You need a general liability policy to protect your business from lawsuits related to bodily injury, property damage, and personal injury.
Some scenarios in which a general liability policy would pay for lawsuit costs include:
- One of your agent’s clients visits your main office to sign some paperwork. They trip on an icy step on their way out the door and suffer a concussion.
- While setting up an open house, you spill a cleaning agent and damage your client’s hardwood floors. The client has to spend thousands in repairs before selling the home.
- You redesign your brokerage’s logo, and it looks similar to a competitor’s. They allege you infringed on their copyright.
No matter how diligent you and your agents are, you never know when a client will file suit. A liability policy provides the protection you need, whether you win or lose the case.
Commercial Property Insurance
Any real estate broker who rents or owns an office needs property coverage to protect the building and its contents. If a bad storm rolls through town and sends a tree through your roof, ruining several computers inside, your policy would pay to repair or replace the damage.
You may need commercial property insurance even as an independent broker working out of your home. While some homeowner’s insurance policies offer limited coverage for business property, it may not be enough to replace your equipment after a loss. Additionally, many commercial property insurance companies cover lost income if you shut down operations after a property loss event, whereas homeowner’s policies do not.
If you own a small real estate business and want an easy way to combine liability and property coverages, consider a business owner’s policy.
Cyber Liability Insurance for Real Estate Agents
You and your agents store a substantial amount of confidential client information on your company network, from social security numbers to information about their occupations. If you lose that data in a breach, your clients can sue your business. And on top of lawsuit costs, you may have to pay to restore your network, notify clients about the breach, and work with a PR firm to minimize the reputational damage.
With a cyber liability policy, you may not have to pay anything out of pocket to protect your company in the aftermath of a cyberattack. Many cyber policies cover:
- Ransom payments
- Lawyer fees
- PR services
- Credit monitoring
- Network restoration
Real Estate E&O Insurance
Even the most seasoned real estate agents sometimes make mistakes, which can turn into lawsuits. For example, let’s say you hire the best inspector in your town, but they fail to notice a water problem in the basement of a home. Your clients move in before a big storm hits, and their basement gets flooded. They allege they would not have moved forward with the home purchase if you had disclosed the issue and sue you for negligence.
While the above scenario may seem unlikely, it can happen to anyone. To protect your business and agents from financial loss after a professional mistake, you need real estate professional liability insurance, otherwise known as errors and omissions (E&O). E&O policies pay for lawsuit costs and settlements when a lawsuit is related to the professional services you delivered—or allegedly failed to provide.
Need more information about cyber insurance before you search for a policy? Get answers to your frequently asked questions and learn how to get the best coverage.
Commercial Auto Insurance
Your real estate agents spend almost as much time on the road as they do at the office or client properties. With so much time spent on the road, it can be hard to avoid car accidents, windshield chips, or hail-damaged roofs. If this damage occurs to company vehicles or personal cars used for work, you need a commercial auto policy to cover the costs.
Commercial auto policies will pay to repair damage to your vehicles during certain covered events, and it also covers lawsuit costs if another driver sues your business following an accident.
Workers’ Compensation Insurance
If you own a brokerage or loan office with at least one employee, you are most likely required by law to carry workers’ compensation insurance, and for good reason. This coverage protects employees from financial loss after a work-related injury by paying for medical bills, rehabilitation costs, and lost wages.
Even if you’re exempt from coverage requirements as a sole proprietor, you may want to consider buying a policy. Some health insurance companies won’t cover medical costs if an injury occurs at work, so you may be left paying for expensive treatment out of pocket.
Southpoint Is Your Partner in Business Insurance for Real Estate Agents
As a real estate business owner, covering your risks isn’t as easy as finding and buying a few policies. If you’re unsure where to start, turn to Southpoint. We work with a diverse group of real estate clients across the Midwest and beyond and use our close relationships with insurance companies to create the perfect program for their businesses.
Whether you need one new real estate professional liability insurance policy or a full suite of coverages for your business, our team can ensure you get the coverage you need at a price that fits your budget. Get in touch today to request a quote or learn more about our business insurance for real estate agents.