Real Estate Agent insurance – cost and coverage

Whenever you budget the expenses of your business, Real Estate Agent insurance must be high on the list because you can’t always know exactly what can happen in the future.

With the protection provided by general insurance and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Real Estate Agent enterprise, you must consider how much financial liability you are taking on.

If your Real Estate Agent business runs without proper insurance, you are taking a giant chance not just of losing some money but of a final wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions. 

In this article, we are giving very general guidelines for growing businesses to explain what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Real Estate Agent business?

What this means, for any Real Estate Agent business owner, is that if some person claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Real Estate Agent business is not protected by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount a judge can award in any case against the state.

In a court case, it’s purely the privilege of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sort.

When you are running your Real Estate Agent operations, you can’t escape responsibility for the results of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you as a person.

What does Real Estate Agent insurance protect you from?

For your Real Estate Agent business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

As well there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Real Estate Agent business owner should consider when negotiating the insurance needed.

The main headings of insurance for your Real Estate Agent businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Real Estate Agent business is dealing directly with other people, and that means you always have the danger that some accident can happen to them themselves or else something of theirs can be damaged.

In such a case, they can demand compensation.

General liability insurance policy for your Real Estate Agent business insures you against claims coming from injury to visitors or damage to their property.

It protects your Real Estate Agent business from the claims themselves and in addition to any follow-on court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your Real Estate Agent business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Real Estate Agent insurance operations.

Professional liability insurance for your Real Estate Agent business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your Real Estate Agent business for them, you can quickly have to fight a law suit.

Even if the lawsuit against you is ruled in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Every small Real Estate Agent business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of Real Estate Agent insurance section below for average prices of professional liability insurance for your Real Estate Agent operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that what you delivered didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to understand the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for results caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for Real Estate Agent

Only you can determine exactly how much insurance you must have.

Best advice is to consult with experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Real Estate Agent business

Be careful! – most policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the vehicle is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial van policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

In addition, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your van is involved in a collision.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The necessary value of the insurance is calculated on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Real Estate Agent business needs specialized and costly equipment, you know how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can wipe-out your whole business in one stroke.

Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy any equipment needed to keep your Real Estate Agent business running.

It is impossible to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Real Estate Agent business’ equipment.

Commercial Property insurance

Any Real Estate Agent business that owns or rents space in a building must have a commercial property insurance policy.

If you own the building, you certainly have a substantial capital investment, along with a big liability if there’s a mortgage.

Any physical building location needs to carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Real Estate Agent business deals in areas of high risk, like California or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where extreme cold snaps can cause damage to outer coverings of Real Estate Agent business premises, there is a need for more supplementary cover than in warmer climes.

Because the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Real Estate Agent insurance section below to give some indication of the average prices per million dollars of property insurance for your Real Estate Agent business.

Temporary insurance by month, week or day for your Real Estate Agent business

Is your Real Estate Agent business working part-time or casually, or is the level of business variable?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Real Estate Agent – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having the same risk cover.

The important feature of short-term insurance is that you purchase the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover improved.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Real Estate Agent business

You have the choice to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized Real Estate Agent businesses, such as yours.

There are two limits that will determine whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle risks.

Also, the size of your business will determine whether you are eligible to take out BOP cover.

The usual business that is eligible for a BOP policy must have no more than one hundred employees, and not more than five million dollars in annual sales.

In addition, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Real Estate Agent business employees

In most states, it is mandatory to have workers compensation insurance when your Real Estate Agent business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if an employee experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s laws in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you can’t take out your workers compensation obligations from private insurance corporations.

Workers compensation rates are worked out based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every Real Estate Agent insurance requirement is unique, there are enough examples of usual quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have gathered for the main types of insurance your Real Estate Agent businesses needs.

Cost of insurance for your Real Estate Agent operations depends on many different factors.

We have calculated these figures for small self-employed Real Estate Agent businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like New Mexico, they will be about 20%-30% cheaper.

The location and size and type of your Real Estate Agent business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

Also you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Real Estate Agent operations?

This is a general term used to describe common insurance policies designed to protect Real Estate Agent business owners from risks like bodily injury, property damage, claims of negligence.

Does my Real Estate Agent business have to have insurance?

Some of the kinds of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Real Estate Agent business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the most common policies for Real Estate Agent insurance.

How much will Real Estate Agent business insurance cost?

In addition to the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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