Essential Insurance Tips for Real Estate Agents
In the fast-paced and unpredictable world of real estate, having the right insurance coverage for your business offers a safeguard, risk mitigation and peace of mind.
Real estate agents face a myriad of risks, including:
Legal:
- Misrepresentation, particularly if they mislead buyers or sellers about a property whether accidentally or intentionally
- Negligence, where an agent fails to act in the best interests of their client, they could be sued for negligence (such as for failing to properly screen tenants and them damaging the property or getting into rental arrears; or failing to disclose all material facts about a property)
Financial:
- Market fluctuations meaning it’s challenging to find buyers or sellers, which can lead to a loss of commissions and business continuity issues
- Client disputes, including about the amount of commission an agent charges. Such issues can be costly and take time, and
Personal:
- Safety, when agents work alone, such as during property inspections
- Stress due to work demands such as long hours, which can lead to stress and burnout.
As well, for agents who manage rental properties, they must comply with regulations that can vary depending on where they operate in Australia. The risks of non-compliance are high. For example, a Melbourne real estate agent was fined more than $200,000 in April for trading while unlicensed. Underquoting or inadvertently selling the wrong property can also attract hefty fines. Constant changes in legislations is another challenge.
Comprehensive insurance policies are a key part of real estate agents’ risk management strategy and offer some financial security needed to navigate the complexities of this industry.
Workers’ Compensation Insurance
For real estate agencies with employees, workers’ compensation insurance is not just important—it’s mandatory. This insurance covers medical expenses and lost wages for employees who are injured or fall ill due to their work.
Even for sole traders and those operating with an ABN, Workers Compensation Insurance might be required under certain conditions. Ensuring compliance with these regulations is crucial to avoid hefty penalties and to maintain a safe working environment for your team.
Public Liability Insurance
Public Liability Insurance is essential for any real estate business if you have an office for your clients to visit or you are often visiting your client’s properties. This policy protects against claims of injury or property damage that occur in the course of your business operations.
Whether it’s a client slipping when visiting your office or damage caused during an open house, public liability insurance covers the legal costs and compensation, safeguarding your business from potentially devastating financial losses.
Data Breach and Cyber Liability Insurance
In today’s digital age, cyber liability insurance is becoming increasingly vital. Real estate agents often handle sensitive client information electronically, making them prime targets for cyberattacks and data breaches. Typically, your customer data includes passports, drivers’ licences, addresses, and bank account details.
This insurance covers the costs associated with data breaches, including:
With cyber threats on the rise, protecting your business from digital risks is as crucial as safeguarding against physical ones.
Income protection cover
For self-employed real estate agents, considering income protection insurance is equally important. Personal medical expenses can be substantial, and having income protection can mitigate these costs, ensuring you remain healthy and financially secure.
Additionally, income protection insurance payments can be tax deductible as the Australian Tax Office explains.
Getting the right-fit business insurance
Real estate agents face a multitude of risks, from legal issues and financial losses to data breaches and personal injury claims. Professional liability, public liability, and cyber liability insurance are crucial for protecting your business. Don’t wait until an incident occurs – consult with us as your insurance broker or adviser to create and update your tailored insurance plan that gives you the confidence to thrive in the real estate industry.
Important notice
This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.
(07) 3709 8888
[email protected]
If you would like to discuss your insurances further, please feel free to contact us:
Click this link to book your free appt Book an appointment
Recent Comments