Thinking of becoming a real estate agent? It’s a great career if you are willing to put in the hustle and do the work. You can have flexible hours, be your own boss in a sense, and make some money while you are at it. Never forget that even if you have no office other than your home, you still need insurance to protect your business. Every business, even real estate, carries risk, and if you are not protected, you could find yourself in financial peril if something goes wrong. Here are some of the insurance requirements you have, along with insurance that you should get to be fully covered.
Malpractice Insurance
When you are providing a service to someone, you are putting yourself at risk. The risk is that something you do as part of that service could cause a loss for your clients. When it comes to real estate, both buyers and sellers could potentially be dissatisfied with advice you have given or the prices that you got for their property. They may allege that you committed fraud, misrepresented a situation, or were negligent in some way. You may not have done any of these things, but that doesn’ mean that they can’t sue if you think you did.
Defending a lawsuit can cost a lot of money. In some cases, it could be hundreds of thousands of dollars, depending on the amount of loss the complainant thinks they suffered. Even if you are not at fault, a court case could still go against you, and you would be responsible for any damages that are awarded. Without property professional liability insurance, you will have to pay those damages and your legal costs with your business assets. If you don’t have enough business assets, you may have to pay from your personal assets.
Being sued as a real estate agent may not be as uncommon as you think. Imagine you sold a property without any issues. You had an inspection, agreed on a price, and facilitated the deal. However, once the new owner starts to move in, they notice that the foundation is in need of repair. They could then hold you at fault for not noticing the issue and making them aware of it. You are then in legal peril, and must start investing in defense costs. The right professional real estate insurance will provide compensation for those costs, along with any awards against you.
General Liability Insurance
As a real estate agent, you come into contact with a lot of people, and you enter a lot of premises that do not belong to you. When people come to your office, whether it’s your home or not, they are at risk, and you are at risk. They could slip on a wet floor or trip on a torn carpet, for instance. If that happens, then you might be held liable for their injuries, including lost wages if they are not able to work because of the injury.
When you visit the homes of other people, you may be at risk of causing damage to their property. Or, someone you bring to the property for a viewing or for an open house could cause damage. Again, the homeowners might hold you liable for any damage and you will have to have protection to avoid financial calamity. General liability insurance is necessary for any business, but luckily it is not very expensive to obtain.
Umbrella Coverage
Most general liability coverages have a limit for the amount of liability you are able to absorb through insurance. However, if an incident causes you to go beyond that limit, then you will have to pay out of your business or personal assets. Umbrella coverage works as protection against those incidents. You can add to your limit so that you are covered no matter how serious an incident is.
Commercial Automobile Coverage
The vast majority of real estate agents use a car every day for their work. They drive to meet clients at their homes, they drive to viewings, and they drive for negotiations. Many, in fact, use their personal vehicles for these tasks, assuming that they are covered under their personal vehicle policy. However, that is not always the case with personal policies. If you have a car specifically for your business, then you absolutely need to get insurance for it. If you use your personal car, then check with your insurance provider to see if you are covered, and under which situations does that coverage apply. Do not find out that you aren’t covered after you get in an accident.
Cyber Liability Insurance
As a real estate agent, you do work with possibly sensitive information related to your clients. You could have banking information and social security information, for example. You might not realize it, but you are at a high risk for suffering from a cyber attack. If you do have a breach and your customers’ information gets into the wrong hands, they could be the victims of fraud and identity theft. If they suffer losses as a result of this, they could sue you and hold you liable.
Cyber Liability insurance will help protect you from this. It offers comprehensive coverage from any consequences you might face. This includes helping with legal costs, and compensation for damages awarded to the complainant. It also helps by providing alerting services to let your clients know about the breach. You can also get compensation for having to mount a PR campaign to work to rebuild your reputation.
You might think that because you don’t work at a construction site or a factory that you are not at great risk. However, all businesses have some risk to them, and real estate is no different. There are many ways that your business could find itself in peril, whether it be because of a physical injury or because of a reputational risk. Make sure that you keep your business protected so that you can be confident that you are ready for whatever life throws at your business.