Real estate businesses face threats of lawsuits and claims due to the nature of their operations. Clients can file a case against you for giving a wrong advice. As the businesses deal with property, any damage can be a costly affair. Therefore, it is wise to get insurance for your real estate business and transfer the risks.
Some common risks of your real estate business are:
- Misrepresentation lawsuits
- Conflicts of interest with the client
- Lawsuits due to non-disclosure of information
Why do you need real estate agent insurance?
Real estate agents come into direct contact with their clients. Since clients invest a significant amount on real estate, they can file a legal case on you for any errors on your part. Similarly, as a real estate agency, you deal with many agents under you. You have extended liability towards all your agents. Therefore, a real estate agency needs real estate broker insurance and agents need real estate agent insurance to indemnify themselves against these risks.
Marketwatch stated an example of a lawsuit against a realtor in Chicago for charging more than the set commission rate of 6%. In such cases, commercial real estate insurance companies might help you.