As a real estate agent, you’re used to advising your clients about their insurance options for residential and commercial properties. But did you know you also need to protect your own business with insurance coverage?

It’s true. Even though real estate agents must be supervised by a real estate broker or brokerage (or earn their own broker license), they are still considered an independent contractor by U.S. law. That means agents are allowed to manage their day-to-day with minimal supervision but it also makes them responsible for procuring their own business insurance coverage, among other things.

Of course, real estate agents have different insurance needs than a business with a lot of equipment or inventory, like a manufacturer or warehousing company. What types of business insurance should you be considering, then?

Recommended business insurance policies for real estate agents

Not surprisingly, real estate agents require many of the same business insurance coverages held by other professionals, like architects and lawyers. The most important coverages include:

• General liability Insurance: This form of business insurance can cover medical expenses and legal fees in the event that you or your client cause damage to another owner’s property, such as breaking an expensive piece of furniture during a tour. It may also help cover your legal fees and judgments in the event that you are sued for libel or slander.
• Errors and omissions insurance (E&O): Also known as professional liability insurance, E&O policies help protect you from legal claims of negligence or faulty advice by clients. For real estate agents, that could include situations where clients claim improper documentation or disclosure of property issues.
• Commercial auto insurance: If your vehicle is used for business purposes, such as driving to open houses or transporting clients to showings, you’ll need commercial auto insurance to help fully protect your passengers and vehicle.
• Cyber insurance: Real estate agents hold a great deal of private information in their files, from customer information to confidential deal data. Meanwhile, the cost of cybercrime grows every year — now an estimated $6 trillion globally, according to one estimate. Comprehensive cyber coverage is now a must for agents looking to protect against the most common threats to their business. 

If you are a real estate broker that owns your own firm, there are additional business insurance policies you’ll want to add to your coverage portfolio:

• Commercial property insurance: This form of business insurance helps to protect your office and assets — think inflatable dancing guys or your inventory of "sold" signs — from damage, destruction or theft. This is commonly bundled with a general liability policy as part of a businessowners policy, or BOP, as a cost-effective option for building a broad base of protection.
• Workers compensation: If you own your own brokerage and oversee other agents, most states will require you to take out a workers compensation policy to help protect them from injuries on the job. The law varies by state, however, which is why we recommend talking with your UFG agent to discuss your company’s specific needs. 

As you can see, even though there may not be a big facility or expensive machinery to insure, real estate agents need business insurance just like any other professional. Your UFG agent can help you determine exactly what coverages you need, so you can get back to work serving your clients!