Commercial Insurance Business Owners Policy (BOP) Commercial Auto Commercial Flood Commercial Property Commercial Umbrella Data Breach Directors & Officers (D&O) Employment Practices Liability Environmental - Pollution Liability General Liability Product Liability Professional Liability (E&O) Workers Comp Personal Insurance

Real Estate Agents Insurance

Real estate agents play an essential role in helping people buy and sell properties. As they perform their duties, they are exposed to various risks and liabilities that can lead to financial losses. This is why real estate agents’ insurance is essential. In this article, we will discuss who needs real estate agents insurance, the types of insurance needed, how much it costs, and the risks and exposures associated with the profession.

Who Needs Real Estate Agents Insurance?

Real estate agents, brokers, appraisers, and property managers all need insurance. They work with clients, and they are responsible for handling large sums of money during real estate transactions. If anything goes wrong during the transaction, they may be held liable, and the financial loss can be significant. Real estate agents insurance is designed to protect them from such risks.

Types of Insurance Needed by Real Estate Agents

There are various types of insurance that real estate agents need. These include:

  • Errors and omissions insurance (E&O): E&O insurance is designed to protect real estate agents from claims made by clients alleging that the agent failed to perform their duties or provided incorrect information. This type of insurance covers legal fees and damages awarded in the event of a lawsuit.
  • General liability insurance: General liability insurance covers bodily injury and property damage caused by a real estate agent or their employees. For example, if a client is injured while touring a property, general liability insurance will cover the medical expenses and legal fees associated with the claim.
  • Cyber liability insurance: Real estate agents deal with sensitive client information, such as financial statements and personal identification information. Cyber liability insurance protects against losses resulting from data breaches or other cybercrimes.
  • Property insurance: If a real estate agent owns their office or has invested in property, they will need property insurance to protect against losses resulting from damages or theft.

How Much Does Real Estate Agents Insurance Cost?

The cost of real estate agents insurance depends on various factors, including the coverage needed, the size of the business, and the location. On average, E&O insurance can cost between $500 to $1,500 per year, while general liability insurance costs between $400 to $1,000 per year. Cyber liability insurance can cost between $500 to $2,000 per year, and property insurance costs vary depending on the value of the property.

Real Estate Agents Risks and Exposures

Real estate agents face various risks and exposures in their line of work. These include:

  • Errors and omissions: Real estate agents may make mistakes during transactions, such as failing to disclose defects in a property or misrepresenting a property’s value. These mistakes can lead to lawsuits.
  • Bodily injury: Real estate agents may be held liable for injuries sustained by clients during property tours or other related activities.
  • Property damage: Real estate agents may be held liable for damages caused to a client’s property during the course of a transaction.
  • Cybercrime: Real estate agents deal with sensitive client information that can be targeted by cybercriminals.

Commercial Insurance and Business Industry Classification

  • SIC CODE: 6531 Real Estate Agents and Managers
  • NAICS CODE: 531210 Offices of Real Estate Agents and Brokers, 531311 Residential Property Managers, 531312 Nonresidential Property Managers
  • Suggested Workers Compensation Code(s): 8721 Real Estate Agency – Outside Employees & Collectors, 8810 Clerical Office Employees NOC, 9012 Building or Property Management – Property Managers and Leasing Agents & Clerical, Salespersons, 9015 Building or Property Management – All Other Employees

Real Estate Agents Insurance – The Bottom Line

Real estate agents insurance is essential to protect against the risks and liabilities associated with the profession. The cost of insurance depends on the coverage needed, the size of the business, and the location. Real estate agents need to assess their risks and exposures and invest in the appropriate insurance coverage to protect themselves and their clients. By doing so, they can continue to provide their valuable services without the fear of financial ruin in the event of a claim.

Scroll to Top