There are several types of business insurance you should consider if you run a real estate agency. These include:
Professional indemnity insurance
The greatest risks faced by real estate agents relate to legal liability. Whether a client claims you undervalued their property, or a property deal falls through, there is always a risk of a professional liability lawsuit. For this reason, professional indemnity insurance is a must for all real estate agents.
Professional indemnity insurance covers you against claims that the service you provided was negligent or fell short of expected professional standards. It’s the most important type of insurance to have if you’re in the real estate business and is a compulsory requirement for membership of most professional associations. Cover is available starting from $250,000, but can extend up to $10 million or more.
What it covers
- Cover for your legal defence costs
- Payment of compensation if there’s a successful claim against you
- Payment of court-awarded damages to the litigant
- Cover for the cost of disciplinary proceedings or investigations
Public liability insurance
Public liability insurance is also essential if you have a sales office which is visited by the public. It will cover you in the event a client or a member of the public is injured or sustains property damage as a result of your negligent business activities. This insurance can offer between $5 million and $20 million worth of cover, although higher limits are available if you sell property worth millions of dollars.
What it covers:
- Third-party personal injury claims
- Damage to a third party’s property
- Legal fees to defend yourself
General business insurance
General business insurance may also be worthwhile to protect your office or business premises from theft and natural disasters. It can also cover portable equipment such as laptops. A business insurance package can also include additional glass breakage insurance, which can offer protection in case your glass shop front or office reception desk sustains damage. Commercial vehicles aren’t included under general business insurance, so you may need separate commercial vehicle protection for your work vehicle.
What it covers:
- Fire, storms, theft, vandalism and collision which cause damage to your business assets
- Specialist cover for electronic equipment and other portable equipment
- Limited business interruption insurance
Cyber liability insurance
Cyber liability insurance can offer you financial protection from the work of cyber criminals who may be after your client’s confidential information. It’s another form of insurance which is vital for real estate agents and also other associated professionals such as accountants, lawyers and conveyancers.
What it covers
- Data breaches including theft of client information
- The cost of a forensic investigation into the cause of the breach
- Data recovery costs
- Cyber extortion and denial of service threats
- Crisis management costs
- Advertising and communicating with customers
- Legal costs including any fines and penalties imposed