Insurance for Real Estate Agents - What you need to know
As with any business that deals with the public, real estate agencies are exposed to a certain level of risk. One of the best ways to reduce this exposure is to have the right insurance policies in place. However, even with these insurance policies not all claims will be successful.
Let’s take a look at the four types of insurance policies that are suitable for real estate agencies followed by four ways to maximise your chances of a successful claim.
Professional Indemnity Insurance
This insurance covers your real estate agency for any advice or consultancy services you provide to your clients. It’s particularly important if you manage open houses or properties where you perform inspections and manage maintenance issues. In fact, this insurance policy is so important that we suggest you discuss your business thoroughly with your Adviser. Otherwise you could be underinsured and left with a hefty bill that isn’t completely covered by your insurance policy.
Public Liability Insurance
This policy covers your real estate agency against claims of third-party personal injury and property damage, but also against advertising liability. Personal injury and property damage claims can be related to open house inspections, whilst advertising liability often refers to an agency’s management of a property’s promotional campaign. The latter is a claim that you might not have considered, making this type of insurance even more important for real estate agencies.
Directors and Management Liability Insurance
Whilst most SME business owners might wrongly believe that this insurance is mainly geared to large companies, there is one subsection that is very relevant for real estate agencies. So apart from protecting directors and officers from the exposure of managing a company, it also offers Employee Practices Liability. This particular component covers real estate agencies from claims of wrongful dismissal or discrimination, topics that are regarded to be employment related wrongful acts.
With the growing threat of cyber-crimes around the world, real estate agencies need to not only maximise the protection of their client’s data, but also protect themselves against these crimes. That’s where Cyber Insurance comes into play because it covers your business for a range of losses due to cyber breaches, as well as third-party Security and Privacy Liability.
Four ways to maximise your chances of a successful claim
Just because you have the right policies for your real estate agency doesn’t mean that all claims will be successful. So, here’s four tips that should head you in the right direction.
- Regularly review your insurance needs: Make sure that you not only have the correct policies in place, but that you also have the level of indemnity you require.
- Think ahead to future insurance needs: Make sure that you anticipate changes to your business so that you have the right cover in place when it’s needed.
- Inform your insurance adviser of any business changes: Make sure that you disclose all relevant business changes to your adviser as these may affect your liability.
- Finetune and backup all documentation: Make sure that you document everything meticulously as well as regularly backing up this documentation.
Real estate agencies require a specific set of insurance policies to ensure that they minimise their risks, but they can also maximise their chance of a successful claim with a few easy steps. To your real estate agency’s insurance needs, talk to an insurance specialist today and contact Gail Findlay.
This article originally appeared on Insurance Advisernet News and has been published here with permission.