How to Choose the Right Insurance for Your Real Estate Business
What insurance does your real estate business need?
Insurance for your real estate business can be confusing due to the liability created by independent contractors — and other issues. So which types of policies does YOUR business need?
Here’s what you need to have in addition to real estate Errors and Omissions (E&O) insurance, to protect your assets. (Learn about each type of policy below.)
Critical Coverage Options
There are several coverages recommended for real estate offices that you should be sure your policies cover:
Non-owned auto: This covers liability for employees driving their own vehicles while performing work. Most independent contractors, like plumbers, can’t create liability for you if they’re in an accident. However, independent contractors that are under your supervision (i.e., agents/brokers) can drag your firm into a lawsuit, especially if they’re driving clients to showings, etc. So this is essential, even if you require them to add the firm as an Additional Insured on their personal auto policy.
Property Away from the Premises: Most policies provide limited or no coverage for property away from the listed location(s). You’ll want to be sure you have coverage when you and your staff are on the road (as most of us take our laptops with us to visit clients, etc.) You should also be sure to provide all of your firm’s addresses to assure all will have on-premises property and liability coverage.
Open House & Showings Coverage: When you host an Open House, you take temporary “care, custody, and control” of the premises. That makes you legally responsible for damage and injuries that occur. Many E&O, general liability (CGL) and BOP policies have an option to cover Open Houses. In addition, your CRES E&O policy has an option (called “Contingent Liability”) to cover not only Open Houses, but also showings. Showings are more frequent causes of litigation, because you have less knowledge/control of the premises, but are still responsible for the safety of your clients.
Fidelity/Crime Bonds: Remember the nuns accused of stealing $500,000 of school funds? It’s good to trust your employees, but even better to have insurance in case you’re wrong. Bonds cover you if your employees steal client money.
Have questions? Just ask.
We are your real estate insurance experts. We have a wide variety of real estate E&O policies available—as well as Business Owner’s Policies and General Liability, comprehensive Cyber Liability, Workers’ Compensation policies, and Surety Bonds.
Still confused or want a customized review of your business insurance needs? Contact us today.