Real Estate agent can be exposed to legal disputes and are vulnerable to lawsuits due to the nature of their business. Expense from ongoing litigation can be quite devastating. The psychological effect can increase stress level and prevent you from performing at optimal level. Even a small human error can be detrimental to the business, therefore many great real estate agents choose to equip themselves with real estate insurances for the peace of mind.
To help you with the consideration, please take some time to understand the purpose of the different types of real estate insurance and how they can benefit your business with the protection you deserve.
General Liability Insurance
As the name suggests, this type of insurance is designed to protect you against claims resulting from damages caused by you to a person, as well as copyright, advertising and property damage claims. If a prospective client slipped while walking over the wet floor at your office, you could be legally responsible for that person’s bodily injury from the fall. The general liability insurance will protect you from the claims and any related medical bills. This insurance is popular for many business owner against such liability, and not just specific to real estate agent.
Real Estate Error and Omissions Insurance
Similar to doctor’s malpractice insurance, real estate agent has a shield called E&O Insurance. It is a professional liability insurance that pays for legal costs for any lawsuits brought on by client against the agent.
Error and omission can happen during the preparation of the deal and other legal papers. Some of these issues could be easily corrected, while other could have more serious impact such as a hefty financial compensation or the cancellation of the deal altogether. Professional liability insurance protects the agent from lawsuits brought on by client, arising from mistakes while performing the duties of a real estate agent.
This insurance is ever more important in a declining real estate market. Your former client who purchased a property from you a while back, could be upset to see the property value decline and sue you for negligence in home search. The professional liability insurance also protects the real estate agent from matters such as misrepresentation, negligence and failure to disclose material facts. Regardless of whether the accusation holds true, a pending lawsuit will always affect you financially and mentally.
Business Owner Policy
The Business owner policy is a customizable insurance policy that may include a collection of policies. For example, a protection package that offers the agent the general liability insurance as well as the coverage for business equipment such as computer, furniture, etc. By bundling into one package, the BOP can provide the agent the insurance coverage they need at a cheaper premium.
Real Estate Agents Workers Compensation Insurance
For real estate brokerage owner with other agents working in the firm, the Real Estate Agents Workers Compensation Insurance is a good consideration. This insurance protects the agents from job-related injury and illness. This is especially important since most agents are paid strictly on commission, any injury or illness would completely halt income, the worker compensation insurance comes extremely handy, which would provide some financial support to the insured agents to get through the tough times.
There is another insurance for brokerage owner called the Real Estate Agents Employment Practices Liability Insurance. It offers protection against harassment, discrimination claims and other employment-related litigation in the firm.
Regardless of whether the allegations are groundless, fighting them out in court is always a time-consuming and costly process. It is important to shield your hard-earned assets from any litigation and consider some of these real estate insurance to mitigate any unexpected legal risks.
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