Open houses are great. You can reach a wide audience of potential buyers in a short amount of time, hopefully leading to a sale. But did you know that open houses, as well as showings, can also be fraught with risks?
Simply put, humans are to blame. In the barely-controlled chaos that is an open house, a prospective buyer can trip on loose carpet and twist her knee. A dog can get loose and bite you, or one of your prospective buyers or their child. Jewelry or other property can somehow go missing. Art can be damaged, windows can be broken, carpet can be stained—the list can go on and on. Humans, by their nature, will be human and accidents will happen. So who covers it? Your firm, the seller’s property liability insurance, or you? How do you protect yourself?
Know where the hazards are
As the professional, you are held with what the court system refers to as a duty of care. That means that since you have the knowledge and experience, you should be the one identifying potential risks and warning anyone you take through the property about those risks. If, for example, a potential buyer attempts to open an old window that breaks and it cuts them, you may be held personally liable, because you should have known the window was a hazard and warned the potential buyer about it.
Mark it up
Protect yourself and others by going through the property with the sellers prior to the open house to identify any and all hazards. If your seller can’t fix them, place clearly marked warning signs to warn anyone that may be in the home on open house day. Taking it a step further, take a picture to document that you identified the risk and placed a warning sign prior to the open house.
Pets and livestock
Some sellers aren’t able to relocate dogs, other pets, or livestock on open house day. If this is the case, you need to make sure that the animal is contained prior to the open house or showing. Anyone viewing the property needs to be warned that there is an animal on the premises, and that they are to stay away from where it is contained. While most insurance (be it property liability or E&O) will cover animal bites, more insurance companies have begun to exclude certain dog breeds. If you suspect that your seller’s dog is one of those breeds, check with their insurance as well as yours prior to the open house.
When showing the property
When it comes to protecting potential buyers and yourself during an open house or showing, you are your best defense:
- Do a thorough walk through with the sellers to identify and mark hazards before an open house
- Always open doors and windows for potential buyers—the less they touch, the better
- Carry a first aid kit in your car for minor cuts and bruises
- If the property is particularly risky (like a construction site) have anyone that sets foot on the property sign a liability waiver
- Advise anyone with children to hold their child’s hand during the showing
- In case of an emergency, call 911 immediately, and do not transport the victim unless it is absolutely necessary
- Record and report any incidents immediately
Most importantly, identify the gaps
Your firm’s E&O insurance may carry some coverage should a personal injury lawsuit be brought against you. However, like all aspects of E&O insurance, there is no way to tell just how much that insurance will cover. This is a gap. Your seller may or may not have their own personal liability insurance for the property, leaving you open to take the blame. This is a gap. Your own personal E&O insurance may also help cover you, but it may not cover you for personal injury or property damage that happens at an open house or showing. This also a gap.
A Contingent Liability Endorsement adds bodily injury and property damage coverage to your policy. With showings being a regular business activity for most agents, this type of coverage shouldn’t be overlooked.
Have you experienced property damage or a personal injury incident during an open house or showing? What was the outcome? Tell us in the comments below!