CRES Insurance, a Texas REALTORS® errors and omissions risk management partner, recommends that your brokerage’s policy cover the following:
This covers liability for employees driving their own vehicles while performing work. Most independent contractors, like plumbers, can’t create liability for you if they’re in an accident. However, independent contractors that are under your supervision (i.e., agents and brokers) can drag your firm into a lawsuit—especially if they’re driving clients to showings. So this is essential, even if you require them to add the firm as an Additional Insured on their personal auto policy.
Property Away From the Premises
Most policies provide limited or no coverage for property away from the listed locations. You’ll want to be sure you have coverage when you and your agents are on the road, as you likely take your laptop and other property with you to visit clients and perform other duties. You should also be sure to provide all of your firm’s addresses to assure all will have on-premises property and liability coverage.
Open House and Showings
When you host an open house, you take temporary care, custody, and control of the premises. That makes you legally responsible for damage and injuries that occur. Many E&O, general liability, and business owners policies have an option to cover open houses. In addition, some policies may have a Contingent Liability option to open houses and showings. Showings are more frequent causes of litigation, because you have less knowledge and control of the premises but are still responsible for the safety of your clients.
It’s good to trust your employees but even better to have insurance in case you’re wrong. Bonds cover you if your employees steal client money.
Get more information about these and other insurance options by contacting CRES Insurance.
Is it normal for a brokerage’s E & O Insurance to not have coverage when the listing agent is also the owner of a property?