Top Liability Insurance Policy and Coverage for Real Estate Agent
It is quite interesting that the real estate agent profession is more like a tip of the iceberg. This is because it brings heaps of money seemingly but involves high risks and losses as well. Realtors have to make bigger transactions day in and day out. It can lead them to some worse consequences as well, if transactions go wrong due to any negligence or mishandling of the data. In such a worst case scenario a liability insurance policy or coverage for real estate agents can favor the realtors in an efficient way to compensate for their loss.
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Why do Real Estate Agents Need Liability Insurance?
Needless to say that realtors have to deal with multiple clients every single day and their deals normally involve unmanageably bigger amounts of money. So it is quite common to find them defending lawsuits because of their negligent dealings or deliberate misrepresentation of the terms and conditions. There can be several other situations of misunderstanding like missed disclaimers and ambiguity upon a boundary line of a land property.
Therefore, Real Estate Agents always need some special cover or insurance to protect their professional services and dealings. As there exists a perfect solution for every problem, here comes the Professional Liability Insurance for Realtors. Similarly, if they are engaged in small businesses and are at a risk of property damage or any bodily injury then they need to look for some of the best Business Liability Insurance.
What does Liability Insurance Cover?
The liability insurance is a broader term which defines numerous types of coverage against third party lawsuits. In case any individual or an agency believes that you have inflicted harm or injured them, or damaged their property and they file a lawsuit against you to seek justice then liability coverage can compensate for your legal expenses according to the plan you have bought.
Let us have a quick glance at what does it cover practically:
A) Fee of the Attorney General
B) If the party that has filed the case against you withdraws its claim voluntarily by dropping the lawsuit (The Settlement Amount).
C) The payment you are supposed to make according to the respected jury.
D) Fees of an expert witness.
E) For the direct payments that you give to the plaintiff for property repair or medical expense.
Common Types of Liability Insurance Available
Since there are a large number of risks and dangers, there are various types of liability insurance to cover every risk aptly and separately. Let us have a quick look at the common types of liability insurance available:
- General Liability Insurance
- Professional/Business Liability Insurance
- Errors and Omissions (E&O) Liability Insurance
- Cyber Liability Insurance
Eligibility Criteria for Liability Insurance
Liability insurance has become nearly a basic need for almost all kinds of small or giant business owners for the smooth functioning of their business activities. However, there is a certain criteria that everybody needs to follow if he or she wants to get insured in this respect.
1) Your business must not be engaged in the consistent high risk activities.
2) You must have a decent history of regularly filing liability insurance claims.
After having gone through the offerings, types and eligibility criteria for liability coverage briefly, let us explore deeply what liability insurance offers to the real estate agents to compensate for their loss.
Professional Liability (or Errors and Omissions) Insurance for Real Estate Agents
Professional Liability Insurance and Errors and Omissions Coverage are the similar things popular with two different names in the insurance marketplace. It is a wise investment for a real estate agent to get covered by professional liability insurance because it is likely to make up the loss due to any unforeseen risks and potential claims. The professional liable insurance and coverage normally deals with your business (real estate business in this case) that provides professional services to its clients.
The importance of professional liability insurance for realtors can be gauged through the fact that how emotional and personal is the process of selling and buying, especially a property. Furthermore, it involves the transactions of bigger money amounts, so a large sum of someone’s hard earned money is always at stake. So being responsible for fair and smooth transfer of money, property and assets, a real estate agent is always playing with the firecrackers which may also harm him unknowingly or because of his negligence. Nonetheless, if you (as a realtor) are insured with some best professional liability coverage then you can make all the dealings and transactions confidently without any fear of paying for the unexpected loss from your own pocket.
There are few common situations when real estate agents have to necessarily look for professional liability insurance.
In Case of the Buyer’s Remorse
There can arise a situation when a buyer gets heavily dissatisfied with you for misrepresenting or misinterpreting the location, size, boundaries, build or any other must-know buying features of a property. For instance, you have told your client (either deliberately or mistakenly) that he is going to receive a beautiful mansion with a scenic waterfront.
However, to his utmost disappointment, the buyer comes to know there is no such waterfront or lake frontage at all in the house he has just bought through you. Owing to the reason that he has overpaid an extra amount to you for the said feature but it is totally non-existent there as water frontage it is nowhere to be seen in his house. Now your client holds the right and will definitely sue you in the court. Ultimately, it will put your business at stake.
Therefore, you can decide better by yourself how a professional liability coverage plan can be helpful to you in your bad times. So, consider purchasing some of the options available for professional liability insurance for real estate agents.
In Case of Wrongful Discrimination
Since your real estate agency is operating in diverse societies and you as a real estate agent have to deal with multiple clients coming from varied ethnicity, race, nationality, color and creed. You must be prepared to face a situation when a client reappear to your office and claim that you have deliberately kept him in shadows by concealing the most attractive and catchy options for buying a valuable property for him because of any racial or other discrimination.
Even if you haven’t done anything like that, it is very likely to see such cases in a cross cultural society of today’s world. Such an insane claim can lead you to defend a lawsuit in the court and would damage your reputation badly.
Wrongful Discrimination allegations are taken very seriously by the legal authorities, so you should be preparing yourself to face that day confidently way ahead of time. All you need is to go for some compatible professional liability coverage plan for your real estate business.
General Liability Insurance for Real Estate Agents
The General Liability Insurance is normally interchangeably used with the term “Commercial General Liability Insurance”, however, both of these are more the less same. The general liability coverage protects your real estate business being sued by a third party in court due to any physical injury or property damage by you, directly or indirectly.
Normally, realtors pay very little attention to this aspect of possible risk from third party lawsuits, however it is a practical reality that you can’t deny. It is very common for the realtors to bring their clients to the exact home locations, commercial markets or construction sites to give them a detailed orientation of their property that they are interested in purchasing.
Moreover, many times realtors have to organize brand awareness and promotion seminars for their agency to outreach a bulk of targeted clients. So it is nothing strange if any untoward incident takes place there like any bodily injury or property damage.
Physical Injury Scenario
Let us consider an instance where a client visits a realtor’s office for getting useful information regarding the best possible options for purchasing a desirable property. In case, the client drags a loose broken chair to sit on and falls down on the ground instead or he gets injured because of a greasy or slippery floor of your office. In such a situation, you may be held accountable for the bodily injury of your client as it took place in your office. Here comes the General Liability Insurance to save the realtors to pay for the unexpected medical expenditure on the recovery of your client.
Property Damage Scenario
There are times when a realtor as a middleman between a purchaser and a seller has to bring the buyer to visit the seller’s property. Imagine, while going through the corridors or the shelves in the kitchen a flower pot or any decoration piece/artifact is damaged by the realtor unintentionally. It can cost the realtor some heavy price because such items can be of high price at times. An uncovered or uninsured realtor will definitely find himself in serious trouble then. So it is honestly advised to get prepared before time by availing the best possible options of General Liability Insurance for Real Estate Agents.
Cyber Liability Insurance for real Estate Agents
Apart from any doubt, realtors have to deal with the sensitive data of their clients and have to make mighty transactions so the security of the digitized data is the chief concern every time. Cyber Attackers are constantly attempting to catch a big fish, if their client’s data is accessed by any cybercriminal then he is surely at the high risk of identity theft or digital robbery you can say. Ultimately, he can sue the realtor in the court.
However, the Cyber Liability Insurance provides full coverage to the real estate agents in case of a data breach by some nasty cyber-attack.
Top Liability Insurance Policy and Coverage for Real Estate Agent
It is always hard to decide on the best possible liability insurance options for the realtors because of the diverse choices available there in the marketplace. However, we are mentioning two of the well reputed and longstanding liability insurance providers in this regard.
Hiscox is our top pick while setting our preferences for choosing the best liability insurance provider for realtors.
Why choose Hiscox?
The purpose of selecting Hiscox liability insurance for making up your loss is six-fold:
- It offers a flexible payment option that perfectly suits your budget.
- It presents you with some best customized or personalized plan options under the name of Tailored Insurance.
- It gives an immediate and quick response to your claims.
- It offers best coverage for the contracts.
- It provides cross continental coverage for your business.
- It is a passionate service available to you 24/7/365.
Insureon is another liability insurance provider that is widely welcomed due to its relentless custom care services. Here is the list of realtors which are eligible to be insured by the Insureon:
- Real Estate Agents and Brokers
- Real Estate Appraisers
- Closing Agents
- Mortgage Brokers
- Commercial Landlords
- Property Managers
- Title Abstractors
The crux of the whole discussion is that a real estate agent should never stay vulnerable to pay for the various unexpected losses in his business journey. The wisest of the gestures is to get prepared for every untoward incident or accident before time. So the need of the time is to get insured by any compatible liability insurance provider to protect your business and assets.