Real estate agents face many unique on-the-job risks. Taking steps to help minimize these risks is an important part of protecting your small business, but it can also affect how well you do your job. A safe working environment can help you work with more confidence and helps communicate to clients that you are a professional they can trust.
Here’s a quick guide to help real estate agents minimize common on-the-job real estate risks they may face and how real estate insurance could help:
Buying a home is often an emotional-charged event. Whether a client is looking for the perfect family home or investing in a commercial property, emotions can run high when so much money is on the line. This can sometimes lead to expensive lawsuits, particularly when clients feel that their real estate agent did not perform up to the standards of the industry.
Professional Liability insurance is one way that you can protect yourself against several types of liability lawsuits. This type of policy (also referred to as Errors and Omissions or E&O insurance) can protect you as a professional service provider from financial damages that can result from alleged negligence or an error in the delivery of your services. Without it, real estate agents could find themselves out of pocket for legal expenses that could potentially cost into the thousands of dollars.
Lawsuits covered by Professional Liability insurance includes those resulting from mistakes, errors, or omissions in your work; actual or alleged negligence; breaches of contract; or undelivered services. Policies typically cover the costs of hiring an attorney, as well as settlements or judgements you may be ordered to pay.
Open house accidents and injuries
Showing properties to clients and the public is a big part of a real estate agent’s job. Homes in desirable neighborhoods can draw large crowds, potentially increasing the risk of an accident or injury occurring.
There are many steps you can take to minimize risks during your open homes. Removing tripping hazards and asking the owners to store fragile items someplace safe could help prevent many accidents. Limiting the number of people entering the property at one time and asking another agent to help you keep an eye on visitors can also help.
However, no matter how carefully you prepare a property, accidents can still happen. General Liability insurance can help protect you if this happens. Also referred to as Commercial General Liability (CGL) or “slip and fall coverage”, this coverage protects your business against third-party claims of bodily injury or property damage. So, if a client’s property is damaged or a potential buyer is injured during an open home, your General Liability insurance policy can help protect you against any resulting claims or lawsuits.
Other unforeseen events
While client lawsuits, accidents, and injuries may be common risks for real estate agents, there’s a lot that can go wrong when you’re running a small business. Interruptions to business, equipment breakdown, damage to your property and other mishaps can cause major setbacks in your day-to-day operations.
Rather than spending valuable time finding separate policies to cover all the individual risks you might face, you can instead buy a single combined policy to help your real estate threat management efforts. A Business Owner’s Policy (BOP) is a combination of policies that helps protect small businesses from costly interruptions to service.
A BOP can be customized to fit your needs as a real estate agent. Along with General Liability coverage, you might decide to include coverages for things such as employee dishonesty or non-business owned automobile liability, depending on how you work and what your business structure is.
Real Estate Insurance for your small business
There are many ways to help minimize real estate risks as a real estate agent, including taking out business insurance. Professional Liability, General Liability, a Business Owner’s Policy, and other forms of insurance can provide important peace of mind to you and your clients as you help them buy or sell their property.