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What Insurance Do Realestate Agents Need

The real estate industry involves managing and maintaining properties, appraising them, and selling them to interested parties. Although real estate is a lucrative business, the risk of losing money over property damage or lawsuits also exists.

Real estate agents are often exposed to minor errors. A small puddle in a property that was missed, but where a client slipped and fell during an open house could result in a lawsuit. Natural disasters such as hurricanes could cause property damage. Thieves and squatters are sometimes attracted to vacant properties. The good news is that these events tend to happen once during a full moon, if at all.

However, should they happen, the resulting expenditure on the part of a real estate business can be massive. Lawsuits, claims and settlements, property or auto repair – the costs involved in these scenarios can easily climb to thousands of dollars. Here are five insurance policies that real estate agents need, as a way to mitigate these potential scenarios.

1. Professional Liability Insurance

Real estate agents are required to disclose every detail about a property that potential buyers should be aware of. This information includes details of property damage, any incidents on the property, previous owners and more.

By the time the clients buy the property, they should ideally know the property’s history and what they are getting into as new residents. If the real estate agent fails to disclose any information during this process, it could result in a lawsuit. Similarly, giving wrong information or deliberately hiding facts about the property could also result in a lawsuit.

If there was an error in the property listing, during inspection, maintenance etc, the buyer could legally sue the real estate. A professional liability insurance, also referred to as an errors and omissions insurance, provides coverage against such scenarios. Where business decisions, opinions and professional services result in any financial damage to the client, and they sue, a professional liability insurance can provide cover.

2. Business Owner’s Policy

A business owner’s policy combines three kinds of insurance policies that real estate agents need. These include:

  • General Liability Insurance: Provides protection if the client or a third party slips and falls in the property being viewed. If the client’s property gets damaged, or they initiate a libel or slander suit, then a general liability insurance can provide coverage.
  • Property Insurance: Real estate agents should consider having property insurance in place to protect the various properties under them. From water damage to fire damage, wind damage, vandalism and more, a damaged property can be expensive to repair. A property insurance provides assistance and financial help in repairing properties that are covered for certain kinds of damages.
  • Business Income Insurance: Business disruptions can lead to a loss in profits. If real estate agents aren’t able to do their work on a regular basis, they miss out on their commissions and gains from the day. A business income insurance protects lost wages and helps secure a portion of the lost amount. Scenarios such as natural disasters and other factors that cause business disruptions can be covered under this insurance policy.

3. Commercial Auto Insurance

Real estate agents need to travel regularly for work. To sell the properties under their wing, they need to visit the properties and show potential buyers around the property. A real estate agent may also have to go visit multiple properties in a day.

During commute, they may encounter an accident that leaves the vehicle damaged. The vehicle could also be stolen, vandalized, and damaged in other ways. Repairing a car is expensive, but with a commercial auto insurance, these costs are brought down substantially.

4. Workers Compensation Insurance

Many businesses in the US, including real estate businesses, should have workers compensation insurance as mandated by law. A workers comp protects employees by providing for medical and ongoing care costs should they injure themselves or fall ill during work.

If a real estate agent falls down while inspecting a property, gets hurt, or experiences an accident while on job, then this insurance policy will protect them. People who are on medical leave also lose out on their wages.

A workers compensation insurance policy also helps employees partially recover wages they lost owing to their medical issue.

5. Cyber Liability Insurance

As technology and digital innovations continue to be adapted by industries across the world, real estate businesses have no fallen behind. Data storage, administrative and management tasks, and even client data is often stored on digital devices.

The rise of digital technology has also given rise to cyberattacks, malware and viruses. To protect your real estate business from malicious entities online, you can consider cyber liability insurance. If client data gets stolen for example, then they can sue you.

Cyber liability insurance can provide coverage for situations such as lawsuits over data breaches, help cover fraud monitoring and even cover expenses related to notifying affected parties about data breaches.


Real estate agents can protect their businesses with the right combination of insurance policies. Various risk factors that could potentially affect a real estate business, such as property damage or client lawsuits, can be mitigated by the right insurance policies.

Insurance policies provide financial protection as well as assistance regarding a wide variety of scenarios that could impact a real estate business. If you want to learn more about insurance policies for real estate businesses, then click here.



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