Did you know that most real estate errors and omissions insurance policies don’t offer coverage for claims that arise due to injuries or property damage at open houses and showings?
When you host an open house or perform a showing, you can be held legally responsible for damage and injuries that occur, since you have “care, custody, and control” of the residence. Although most sellers have personal liability insurance as part of their homeowners insurance, their insurance company can come after you for anything paid through a process called “subrogation.” If something gets damaged or goes missing, you might have to pay for it. If someone trips on a rug or falls down the stairs, those doctor’s bills could be all yours.
Tips to reduce your risk of a claim during an open house or a showing include advising your clients about locking up personal property and properly managing pets. Accidents still happen, though. Here’s what you can do to ensure you’re covered before buyers ever set foot on the property:
Be sure your brokerage’s insurance includes coverage for damages and injuries that may occur during open houses and showings. Your brokerage’s commercial general liability insurance may cover such claims.
E&O insurance may also cover these claims. However, there are often exclusions for activities that you perform away from the office.
Look for open house and showings coverage or an endorsement within your E&O policy that adds bodily injury and property damage coverage. Some real estate E&O insurance policies have the option to add contingency liability insurance, but many insurance companies don’t automatically include coverage for open house and showings damages or injury.
Every home is unique; the risks are different each time when bringing clients into an unfamiliar home. With showings being a regular business activity for most agents, this type of coverage is vital.