Do Real Estate Agents Need Insurance?

A realtor shows a couple an empty living room.
| 09.23.22
George Hancock Jr.

Imagine this. You’ve successfully set up your real estate small business. You have your first clients and are eager to get started. At your first showing, you guide your clients through the house, commenting on the original hardwood floors and boasting about the stainless steel appliances. However, as you lead them onto the screened porch, one of your clients trips over the threshold and sprains his ankle. Now what? Call your legal department? You ARE your legal department. 

As a small business owner, you hope to ensure the safety and satisfaction of all clients, but life is unpredictable, and situations will occur regardless of your best intentions. There will always be risks to your real estate small business. Things will happen when you least expect them. You need to safeguard your own assets but also the well-being of your clients. So how can you protect yourself and your business while striving to become a successful real estate agent? 

Do Real Estate Agents Need Insurance?

The short answer is “of course!” As a real estate agent, you are put into many scenarios that could render you liable, such as: 

  • Misunderstood advice
  • A deal that falls apart
  • A client getting injured during a showing
  • An item is broken during a showing
  • Missed deadlines
  • Negligence

These are just a few examples of the risks associated with being a real estate small business owner. Be prepared in the event of litigation and manage the risk to your business and your personal finances. You can find flexible, customizable real estate agent insurance that will work best for your small business. But what insurance do real estate agents need? 

Real Estate Agent Insurance Requirements

Just as a car owner needs insurance, so does a real estate small business owner. The real estate agent insurance requirements will depend on the type of small business you operate and in which state you work. Learn the rules in your state to determine your specific requirements. There are several branches of insurance coverage to choose from but select the type that meets your requirements and works best for your small business. 

A Professional Liability Insurance policy, also known as Errors & Omissions Insurance, is used in the unfortunate event that you are sued due to a disagreement or work mistake. Professional liability coverage can cover legal fees for lawsuits resulting from disputes or discrepancies with your clients. 

A Business Owner’s Policy (BOP) is a comprehensive insurance policy that combines property and liability coverage into a single policy. Any small business that functions out of an office and is equipped with business equipment should consider a BOP. Protecting your business involves the protection of business assets.

Do you have employees in your realty business, or is it just you? If your small business employs a workforce, you should investigate Workers’ Compensation Insurance, a requirement in most states. This coverage protects employees who get injured on the job and also you as a business owner by protecting your business from related lawsuits. 

Finding the Right Real Estate Insurance

Running a small business can be stressful. Revenue may be hard to come by for a while. You may experience a learning curve. But while you’re figuring out how to make it work, don’t let insurance be an “I’ll do it later, it’ll be fine” thing. Make it a priority. Operate your small business with peace of mind. Learn what insurance real estate agents need and what the real estate agent insurance requirements are for your business in your state. Take the time to compare business insurance quotes. Your hard work is worth protecting!

About the Author

George Hancock Jr. is a content writer and advertiser with years of experience helping business leaders reach out to their audiences. He's worked with numerous clients in the automotive, information technology, finance, and construction industries. Having studied international business in school, he's always interested in learning about foreign places and cultures. He's also the proud dad of a biracial son. George's agency, Inkstone Marketing, became a Google Partner in 2020.