The real estate industry is not like any other industry in the United States. Its dynamic nature requires participants to continuously evolve or even reinvent their strategies to take care of changing conditions brought about by business trends and varying levels of government involvement.
Unlike companies where business continuity is relegated to assets that can be easily replaced or even repaired after a disaster strikes, real estate agencies must deal with the physical property—the houses they sell.
This is why you can’t afford to be unprepared. Insurance companies understand this very well and thus offer tailor-made insurance policies that will protect them from different kinds of losses that can come about from their line of work.
Here are five reasons why every real estate agent must have a tailor-made insurance policy.
You can’t afford to ignore your employees
It may seem like having an insurance policy is enough protection for your agency. However, this will not be the case if you fail to protect yourself against possible losses resulting from acts of your employees. Employee fraud becomes even harder to detect when a company does not have a system to monitor its employees’ activities and protect itself from their actions.
In addition, you need to make sure that your agency’s policy covers all possible damages related to employee misconduct. It’s a good idea to get an errors and omissions insurance policy to protect yourself against possible lawsuits from customers who experienced losses as a result of your employee’s mistake or negligence. This way, you can take the necessary steps to avoid losses.
Every real estate agency is unique
The real estate industry requires its agencies to adapt to changes to stay ahead of their competition continuously. This means that your agency should not simply go for a standard insurance plan offered by other companies. Instead, your insurance should be based on the unique nature of the real estate business.
One good example is a policy that protects your agency from losses arising from employee fraud. While other insurance companies offer this type of protection, a tailored plan should include specific provisions to protect yourself against lawsuits filed by unsatisfied customers who accuse you or your employees of mishandling payment procedures in the sale of their property.
Your agency’s insurance policy needs to cover assets that can bring about the downfall of your business. This means ensuring your property if gets damaged or destroyed during a natural calamity such as a hurricane, earthquake, or flood. In addition, some agencies opt for “floaters,” which are separate policies that will protect specific assets that may be difficult to fully replace should the need arise.
One good example is a policy that will cover damage to your agency’s vehicles and equipment. If you plan on selling properties using the Internet, then the same policy can also protect your website from malicious attacks—such as those caused by hackers or cyber criminals—that may require expensive repairs.
A significant loss can take a long time to recover from
When you think of losses, your agency’s property immediately springs to mind. However, it is also essential for you to consider the possible damages arising from lawsuits filed by clients who accuse your agency of committing fraud. These kinds of suits may even leave you with a damaged reputation that can take a long time to repair.
This is why your insurance policy should include protection against client dissatisfaction and legal disputes that may arise from the sale or lease of property. In addition, a policy that provides first-party coverage will provide you with the financial support you need during particularly bad times.
A tailor-made policy is affordable
In most cases, a tailored insurance policy will cost significantly less than the standard plans offered by other companies. This is because you are allowed to remove coverage for items your agency does not need—such as those related to cybercrime and identity theft—to make it more affordable.
In this way, you can have a policy that perfectly covers all of your agency’s risks. A professional insurance broker can also help you evaluate your current coverage and determine exactly what changes need to be made.
One of the best ways to secure your agency’s future is to get a tailor-made insurance policy that will cover all possible expenses resulting from land transactions. This way, you can protect your business against any potential loss—as well as the financial problems associated with it—regardless of what nature or source it may come from.
As long as you have the right insurance policy, dealing with any property-related problems that arise in your agency should no longer be a cause for concern.