Real estate brokers need more than just errors and omissions insurance. They also need worker’s compensation, business liability, business interruption, life and disability, health, and property and casualty insurance.
A person looking for real estate broker insurance may be surprised by the different types of insurance policies available. Errors and omissions (E&O) insurance is typically the first insurance coverage that comes to mind for many real estate professionals as it is responsible for covering claims that are the result of errors, omissions or negligence on their part. While some real estate broker insurance policies are specific to the real estate industry, such as E&O insurance, there are several insurance policies that are just as important to any business owner regardless of their industry.
In addition to E&O insurance, your real estate broker’s insurance coverage must also consist of a worker’s compensation policy. While estate agents are independent contractors and are not considered employees by law, it is still their responsibility to have adequate coverage by law in order to compensate agents and employees if they are unable to perform their job duties. Business liability insurance is another type of real estate broker insurance coverage. This policy is responsible for insuring the real estate broker against any liability that might be caused by the broker or his agents.
Business interruption insurance is another type of real estate broker insurance, as this policy insures the broker against the loss of business revenue that could result if the business loses its ability to operate due to an interruption unexpected, such as a natural disaster. In the event that a hurricane or tornado decimates a particular city or town, for example, a real estate agent may be unable to generate income due to physical damage to properties within the city. This insurance coverage would ensure that the broker can continue to operate until the business is able to generate income in the future.
One type of real estate broker insurance policy that is often overlooked is life and disability insurance. This type of insurance will protect the business from the death or disability of a critical employee, which in most cases will be the real estate broker himself. Many real estate agents will also need to acquire health insurance policies for themselves and their agents. In addition, real estate brokers will need to acquire property and casualty insurance in order to obtain coverage against loss of damage to the business as an entity as well as the physical location of the business.
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