Real Estate Investor insurance – what kind and at what cost

Whenever you budget the expenses of your business, Real Estate Investor insurance must be included in the list because you can’t always know exactly what is going to happen in the future.

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

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

If your Real Estate Investor business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a total wipe-out.

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

Real Estate Investor Insurance

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 we can, 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 Investor business?

What this means, for any Real Estate Investor 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 Investor business is not protected by laws in the same way as states are, where legislation 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 duty 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 Investor operations, you can’t deny responsibility for the consequences of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as a corporation, all of that liability belongs to you as an individual.

What does Real Estate Investor insurance protect you from?

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

In addition there are some legal kinds of insurance that various states require.

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

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

Liability insurance

General liability insurance

Any Real Estate Investor business is dealing directly with customers, and that means you usually have the danger that some accident can happen to them themselves or else something of theirs can be ruined.

In such a case, they can sue you for compensation.

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

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

In many cases, it can also help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The average level of general liability insurance for your Real Estate Investor business would be with a upper limit of $1 million for a single event 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 Investor insurance operations.

Professional liability insurance for your Real Estate Investor business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Real Estate Investor business for them, you can quickly have to fight a court case.

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

Almost all small Real Estate Investor business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

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

Product liability insurance

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

You need to know the specific laws of product liability in your own state.

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

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

Only you can determine exactly how much insurance you need.

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

Commercial insurance

Commercial vehicle insurance for your Real Estate Investor business

Take care! – almost all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the car is being used for business purposes.

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

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

As well, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your truck is involved in an accident.

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

The necessary value of the insurance depends on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Real Estate Investor business needs unique and dedicated equipment, you can appreciate 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.

In addition, 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 unique gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy any equipment needed to keep your Real Estate Investor business running.

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

Commercial Property insurance

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

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

Your physical building location should carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Real Estate Investor business operates in areas of high risk, like California or South Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

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

Whereas 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 Investor insurance section below to give some idea of the average prices per million dollars of property insurance for your Real Estate Investor business.

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

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

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

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

The essential feature of short-term insurance is that you buy 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 increased.

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 Investor business

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

A BOP merges commercial property and public liability insurance by packaging 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 Investor businesses, such as yours.

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

BOPs do not cover your professional liability or commercial vehicle cover.

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

The normal business that is allowed to take a BOP policy must have less than one hundred employees, and maximum five million dollars in annual revenue.

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

Workers Compensation insurance for your Real Estate Investor business employees

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

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

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

Failure to meet a state’s regulations in this regard can leave you as the employer having 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 may not take out your workers compensation obligations from private insurance providers.

Workers compensation charges are calculated 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 Investor insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

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

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

Types of insurance Price range
Equipment insurance $408 – $1117
Commercial insurance $820 – $2815
Public liability insurance $382 – $769
Commercial vehicle insurance $1863 – $2882
Product liability insurance $242 – $659
General liability insurance $598 – $887

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

We have estimated these figures for small independent Real Estate Investor businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, while in smaller states like Oregon, they can be about 20%-30% lower.

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

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

As well you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your suburb.

FAQ

What is small business insurance for Real Estate Investor operations?

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

Does my Real Estate Investor business have to have insurance?

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

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

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

Liability insurance provides protection against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Real Estate Investor insurance.

How much will Real Estate Investor business insurance cost?

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

You should talk to professional insurance agents and brokers, or insurance company representatives.

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