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What You Need to Know About Real Estate Insurance
What is real estate insurance?
Real estate insurance — also known as realtor insurance — is a grouping of coverages tailored for real estate professionals. It comes in all shapes and sizes too. You can purchase this insurance on an individual agent basis, or you can buy it for an entire firm. Since there isn’t a single real estate insurance policy, you can tailor coverage to fit all your needs.
Do I need real estate insurance?
In some states, to maintain a legal license, real estate agents must have professional liability insurance. Even if your state doesn’t require real estate insurance, you should still strongly consider buying it. Not only does insurance provide you financial protection, but it can also help you reach new heights in your work. Insurance can:
- Build client confidence
- Improve trust with colleagues
- Encourage other real estate agents to work with you
- Help you rent an office space
What can real estate insurance cover?
Not every real estate agent needs every possible coverage. Ultimately, your policy will vary depending on the services you provide and whether you’re purchasing insurance for yourself or your business. Potential coverages you should consider may include:
Professional Liability/Errors & Omissions
The National Association of Realtors defines errors & omissions insurance as “a type of professional liability insurance that protects companies and their workers or individuals against claims made by clients for inadequate work or negligent actions.” This means you are financially protected if a client presents you with a lawsuit claiming you, as a professional, did not act in their best interest.
If your business has any company-owned cars for work-related transportation, then you will need business auto coverage. Because the vehicles help keep your business running, a personal vehicle insurance policy can’t cover them. Business auto insurance, also known as commercial auto insurance, provides you financial protection and peace of mind if one of your company vehicles is involved in an accident.
Hired & Non-Owned Auto
While this coverage sounds similar to business auto, they are not the same. Hired & non-owned auto insurance protects against liability expenses arising from vehicles not owned by your company. These vehicles include rentals, as well as your employees’ personal vehicles they are using for work.
As a real estate professional, you are potentially liable for every product, service, and operation related to your business. Even though you stress sound procedures throughout your business, the fact remains that no person is perfect. Despite your best efforts, if your business causes any property or physical damage to a third party, you and your business may face litigation. Commercial liability insurance is designed to protect business owners and assets from common business risks like injury or property damage.
In today’s digital world, cybercrime runs rampant. Data breaches are an all-too-common occurrence and are commonly targeted towards small businesses. Suppose you store sensitive customer information, such as account numbers, driver's license numbers, and credit card numbers, and you are the victim of a data breach. In that case, you are liable for any damages caused by the breached information. Learn about the importance of cyber liability insurance and how to protect your business from cybercrime.
If you employ any number of workers who are not considered owners of the business, you are legally required to maintain a workers compensation policy. You do your best to maintain a safe work environment, but if any of your employees are injured or become ill on the job, you are legally responsible. A workers compensation policy can cover the payment of your employee’s medical expenses, lost wages, and rehabilitation costs.
Is real estate insurance tax deductible?
According to irs.gov, generally, you can deduct the ordinary and necessary cost of insurance as a business expense if it is for your trade, business, or profession. However, we strongly suggest working with your Certified Public Accountant (CPA) to ensure you are correctly following all tax laws.
How much does commercial real estate insurance cost?
This is a question we would love to answer, but there’s not a single number we can give. Ultimately, your premiums will vary based on several factors, some of which are:
- Business location
- Real estate services you offer
- Yearly revenue
- Number of employees, if any
- Your employee payroll
As professionals in insurance for real estate agents, we make it our business to know you and your concerns. We spend time listening and learning to better serve you, our clients.
You’ve worked incredibly hard to build your business and client base. The next step is to protect them. We’ll assess your risks and help tailor an insurance policy for your real estate business.
We’d love to chat with you. Contact us today!