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A career in real estate has undeniable perks: You can earn an excellent living, often enjoy self-employment, and help people realize their homeownership dreams. Step one to doing business as a real estate agent or broker is getting your license. And the next step should be to protect everything you’ve worked hard to achieve. To do that, you’ll need real estate business insurance.
Business insurance provides important financial protection if you’re accused of causing an injury, property damage, or a financial loss. Real estate agents and brokerage owners should consider carrying the following types of coverage.
1. Errors & Omissions Insurance
Real estate pros handle the biggest financial investments that most people will ever make. Accusations of mishandled transactions have the potential to drain your business’s finances and hurt your reputation.
Errors and Omissions (E&O) coverage helps protect your business in these situations. If someone accuses you of making a mistake that causes financial losses, Errors & Omissions insurance can protect you against this claim. This specific insurance can help pay for lawsuit expenses if a client sues you, including attorney fees, court costs, and damages up to the policy limits.
For example, let’s say you didn’t realize that the house you just sold had high-radon gas exposure, and the person that bought it sues you for failing to disclose this defect. At the close of a deal, your client, who is the buyer, feels like you didn't negotiate to get the best price and decides to sue.
Errors and Omissions insurance will give you the coverage you need to operate your real estate business without fear of these unseen risks. The majority of states require it, and it’s by far our biggest recommendation for real estate agents and brokers.
2. Workers’ Compensation Insurance
Real estate brokerages with employees need workers’ comp coverage to legally operate in most states. If an employee is injured on the job, workers’ compensation insurance helps cover medical expenses and lost wages until the employee can return to work.
Even if you’re a self-employed real estate agent or are mainly affiliated with a brokerage for marketing purposes, you should still consider carrying workers’ comp insurance to help pay for costs that your personal health insurance might not cover. What if you slip and fall on a freshly mopped floor at an open house or miss a step when showing a potential buyer the basement? Workers’ comp insurance will help make sure that you don’t end up paying for all medical costs out of your own pocket.
3. Commercial Auto Insurance
Many real estate agents and brokers are frequently on the road for business purposes, which makes commercial auto insurance a crucial part of any insurance package. Almost all states require drivers to carry auto insurance, but personal coverage usually won’t cover work-related accidents. Real estate agents who frequently drive their own vehicles to properties and other locations should consider this type of coverage. This insurance would help with:
- Reimbursements on rentals
- Protections against underinsured motorists
- Property damage
4. General Liability Insurance
General liability insurance is an essential form of coverage that helps protect real estate agents and brokerages from claims of injuring another person or damaging property. It can help pay for medical bills, repairs for property damage, and even legal expenses if you have to go to court. Examples of claims that this insurance would cover include:
- A visitor slips and falls because you didn’t put a mat at the entrance of your office when it started raining outside.
- You accidentally knock over a homeowner’s vase during an open house.
- A client sues you for an invasion of privacy because you shared photos of their home in your ads without their permission.
How Next Insurance Helps Real Estate Pros
Between helping people find their dream homes and supporting their communities, real estate agents have enough on their plate. Next Insurance makes it easy to feel confident about your coverage by offering affordable insurance packages for real estate agents. Their online platform makes it easy to get a quote, review coverage options, and purchase insurance in less than ten minutes.
Receive a free instant quote from Next Insurance today, and find out how you can save up to 30% on insurance designed with real estate agents and brokers like you in mind.