That is obviously a rhetorical question. The question might be, “Where are they the most vulnerable”? The one area that yields the most problems is non-disclosure of home defects. Yet, only 83% of the Realtors are protected by the famous Errors and Omissions insurance. Also, there are thousands of agents in California who are not Realtors, and I am certain that the percentage of coverage for them is even lower.
Another area of possible trouble is driving prospects around in their car. Licensees forget to tell their insurance carriers that they are using their car for business purposes. Why would they do that? Because the insurance company will probably increase their rates. Also, in case of an accident an insurance company might say that they will not cover the costs.
This should be an area of concern for Brokers Owners. They must make sure that their associates are carrying auto insurance with the proper coverage and limits. Also, Owners must make certain they purchase Employment Practices Liability Insurance to cover the cost of law suits brought by employees such as discrimination or harassment. Then, there is Workers’ Compensation Insurance which is the first expense you consider when you hire your first assistant or resident manager of an apartment. And finally you need the Umbrella, the catch all if the rest does not work.
Property Managers, you have some other worries. Your owners must carry the proper insurance in the proper limits, and they must name you as an additional named insured. I can tell you horror stories about problems arising from improper insurance.
What if there is a large law suit involving a property you purchase or sell, and the brokerage does not have coverage. Of course, they will not have many assets in the business corporation. Just a thing for you clients to consider, and maybe you might inquire.
Real Estaters, talk to your friendly professional insurance provider. If you do not have one, get one. By the way, I always look for the CPCU designation on their resume or card, and for real estate related insurance, I look to the California Association of Realtors for recommendations. So get a review of your insurance policies. Do it now, the assets you save might be your very own.
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