From general liability insurance to commercial auto, learn how to understand and purchase the right insurance for your real estate business. Check out our comprehensive articles and resources to discover how you can protect and grow your business.
Real Estate Business Insurance Basics
Types of Real Estate Business Insurance
Who needs real estate business insurance?
Every real estate professional should have insurance coverage, whether you’re on your own or part of a larger organization. Not only does insurance protect you against financial loss in unexpected circumstances, but it can also demonstrate to clients that you’re serious about your work.
If your real estate business meets any of the following criteria, you should consider investing in business insurance coverage:
- You work with clients
- Members of the public visit your business property
- You drive a vehicle for work purposes
- You hire employees
- Your business owns valuable property, such as furniture, computers, or company cars
- You have digital data and networks that need to be protected
Real Estate Business Insurance by Profession
Why is real estate business insurance important?
Clients who are dissatisfied with your professional services may sue you and your business.
Benefits: As a professional in the field, you seek to maintain the highest quality standard in your work while providing the best possible service for your clients. However, despite your best efforts, there may be some clients who end up dissatisfied with your work. Business insurance can protect you and your company against any lawsuits claiming deficiencies or errors in your professional services.
Risks: Whether you believe it to be fair or not, a real estate business deals with so many customers that, inevitably, some customers may feel that they received inadequate or improper service. If those individuals feel they came into significant financial loss as a result of your service, they may choose to sue you and your company. If you’re the subject of a malpractice suit, and your company fails to hold enough assets to compensate for a judgment made in favor of the plaintiff, your own assets are liable to be put on the line to make up for the rest.
Accidents and injuries can happen, especially when interacting with clients.
Benefits: Business insurance can provide financial protection in the face of unfortunate accidents or injuries. If a client is injured on your business property, general liability can provide coverage. If an employee is injured in the course of their work, workers’ compensation insurance can provide financial and medical benefits for them. On some level, the more successful your business, the more customers and employees you’ll have, which in turn increases the risk for an accident to occur.
Risks: Without insurance, a single accident or injury could put your entire business at risk. If your business is unable to come up with the funds to pay for damages or pay the legal fees necessary to defend your business, you may need to sell your business assets or declare bankruptcy.
Certain types of business insurance may be required in your state.
Benefits: In many states, errors & omissions insurance is required for real estate agents. In addition, in almost every state, businesses are required by law to carry workers’ compensation insurance. Even in the safest conditions, accidents can happen, which is why insurance is a necessary solution. If an employee is injured while working for you or if a client is injured while at your offices, insurance will cover you financially as well as make your business compliant with the law.
Risks: Without liability insurance, your business could be on the hook for defending against a lawsuit and paying any judgements or settlements. And without workers’ compensation, your organization is wide open to financial loss should an employee get injured or sick as a direct cause of working for you. Moreover, multiple injuries could lead to financial losses that ruin your business. As many places make workers’ compensation part of the law, avoiding the coverage can land you in legal trouble resulting in penalties, fines, and in some cases, imprisonment.