Real estate appraisers play a crucial role in the real estate industry by providing an objective opinion of the value of a property. They are responsible for assessing and determining the market value of a property, which is used by lenders, buyers, sellers, and investors to make important financial decisions. However, this role comes with its risks and exposures, which is why it’s important for real estate appraisers to have the right insurance coverage.
Who Needs Real Estate Appraiser Insurance?
Real estate appraiser insurance is essential for anyone who works in the real estate appraisal industry. This includes independent appraisers, appraisal management companies, and appraisal firms. Even if you are a self-employed appraiser, you still need insurance to protect yourself from the risks and exposures associated with the job.
Types of Insurance Needed by Real Estate Appraisers
There are several types of insurance coverage that real estate appraisers need to consider. These include:
- Errors and Omissions Insurance: This is also known as professional liability insurance and covers the appraiser in case of any mistakes or errors in their appraisal report that result in financial losses for their client.
- General Liability Insurance: This covers any bodily injury or property damage caused by the appraiser while they are working on a property.
- Cyber Liability Insurance: This covers the appraiser in case of any data breaches or cyber-attacks that compromise sensitive client information.
- Commercial Property Insurance: This covers any damage or loss to the appraiser’s office or equipment, such as computers and measuring tools.
How Much Does Real Estate Appraiser Insurance Cost?
The cost of real estate appraiser insurance varies depending on several factors, including the type and amount of coverage needed, the size of the appraisal business, the location, and the appraiser’s experience and claims history. On average, appraisers can expect to pay between $500 and $1,500 per year for insurance coverage.
Real Estate Appraiser Risks and Exposures
Real Estate Appraiser Risks and Exposures
Real estate appraisers face several risks and exposures in their line of work. These include:
- Lawsuits: Appraisers can be sued by their clients for errors and omissions in their appraisal reports. These lawsuits can be expensive to defend and can result in significant financial losses.
- Property Damage: Appraisers can accidentally cause damage to a property while they are inspecting it, which can result in costly repairs.
- Cyber-attacks: Real estate appraisers collect and store sensitive client information, which can make them a target for cyber-attacks and data breaches.
Commercial Insurance and Business Industry Classification
- SIC CODE: 6411 Insurance Agents, Brokers, and Service, 6531 Real Estate Agents and Managers
- NAICS CODE: 524298 All Other Insurance Related Activities, 531320 Offices of Real Estate Appraisers
- Suggested Workers Compensation Code(s): 8720 Inspection of Risks for Insurance or Valuation Purposes NOC, 8721 Real Estate Agency – Outside Employees & Collectors
Real Estate Appraiser Insurance – The Bottom Line
Real estate appraisers play a crucial role in the real estate industry, but their job comes with its risks and exposures. It’s important for appraisers to have the right insurance coverage to protect themselves from these risks and to ensure that they can continue to provide their services with confidence. By working with an experienced insurance agent, real estate appraisers can get the coverage they need at a price that fits their budget.