We recently interviewed Hunter Hoffman, the Head of US Communications at Hiscox, an insurance company focused on small businesses. Here are a few of his responses on Insurance for Real Estate Agents:
Question: How likely is it for a small business to be threatened with or involved in a lawsuit?
The Institute For Legal Reform report 43% of small business owners have been threatened with a lawsuit or been sued! More than half of all business being sued have less than $1 million in revenues. However, even the threat of a lawsuit can impact small businesses and cost them time and legal fees.
What are the most important policies for real estate brokers and salon owners to have?
For both real estate brokers and salons it is important to have professional liability, also known as errors and omissions, and general liability. Getting insured is usually much cheaper than businesses expect. On average, customers of Hiscox pay around $550 per year for $1 million of both general liability and professional liability coverage.
What types of circumstances would professional liability insurance cover?
Professional liability insurance provides protection against legal claims arising from performing services or providing products. The types of claims that might come up will vary from one industry to another. In the real estate industry, we see many claims coming from buyers that had second thoughts after buying a home. After the fact, they believe that they paid too much or ended up in the wrong property. They can claim the agent provided them bad advice with regards to making an offer, or did not show them enough properties to make an informed decision. Regardless of the merit of these claims, if legal action is taken, it is costly to go to court. Professional liability insurance can take care of providing the legal defense, as well as resulting settlements or negative verdicts.
For more questions and answers, check out the rest of the interview at Fit Small Business.
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