How much does insurance cost for real estate agents and brokers?

Errors and omissions insurance (E&O), also called professional liability insurance, costs an average of $59 per month, or $708 annually, for real estate agents and brokers.

This policy covers the cost of client lawsuits over claims that your work was unsatisfactory, negligent, late, or never completed. Some states require real estate agents and brokers to carry this coverage.

For instance, suppose a buyer claims you failed to disclose a problem with water seepage in the basement and decides to sue. An errors and omissions policy would cover your legal costs, settlement, and other financial losses.

Below is the average E&O policy for real estate agents and brokers who buy from Insureon:

Premium: $59 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000

Several factors influence the cost of errors and omissions insurance, including the type of business you have, your claims history, and the policy limits you choose.

As with other types of insurance, you can save money on your policy by choosing lower limits or a higher deductible.

Reducing your risks also helps you avoid claims and keep your premium low. This includes clear communication with clients and thorough documentation of all communications and agreements.

Real estate agents and brokers pay an average of $33 per month, or $400 annually, for general liability insurance. This policy is sometimes called public liability insurance.

General liability insurance covers common third-party risks at real estate agencies, such as a client who slips on a wet floor at an open house and suffers a bodily injury, or accidental damage to a client's property.

For example, if you break an expensive sculpture during a showing at a client's property, general liability insurance coverage would pay for the repair costs or legal fees if the client sues over property damage.

It also helps pay for attorney's fees and other legal expenses if someone sues your business over copyright infringement or other advertising injuries, including defamation.

Below is the average general liability policy for real estate agents and brokers who buy from Insureon:

Premium: $33 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The per-occurrence limit is the maximum your insurer will pay for a single covered incident, while the aggregate limit is the most the insurer will pay for all claims during the policy period, typically one year.

A $1 million general liability policy means that your insurance company will offer protection for up to $1 million in covered losses and damage for any single claim. 90% of Insureon's customers choose a general liability policy with $1 million per occurrence / $2 million aggregate limits.

General liability insurance costs depend on factors such as the coverage limits and deductible you choose, the size of your business, the types of professional services you provide, your business income, and any additional insured endorsements you select.

Learn more about how your insurance premium is calculated and how to save money on your general liability coverage.

Real estate agencies and brokerages pay an average of $58 per month, or $692 per year, for a business owner’s policy.

A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.

A BOP protects against customer injuries, property damage, and vandalism, along with damage to your real estate equipment. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents.

This is the average BOP for real estate businesses that buy from Insureon:

Insurance premium: $58 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Small, low-risk real estate agencies and brokerages are often eligible for a business owner's policy.

Real estate businesses that are medium-sized and/or higher risk should consider a commercial package policy (CPP).

A commercial package policy also combines your general liability coverage with property insurance, but offers more flexible protection options than a BOP. The average cost of a CPP for real estate agents and brokers is $278 per month, or $3,330 per year.

Real estate business owners may see higher costs if they choose to add endorsements to their policy. Insurance endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help avoid financial losses if a fire or power outage forces your business operations to cease for an extended period of time.

The cost of a business owner's policy is based on a number of factors, including the value of your business property, where you are located, your business income, the number of employees you have, and your specialty.

The average cost of workers’ compensation insurance is $41 per month, or $489 annually, for real estate agencies and brokerages.

This policy covers medical expenses and lost wages related to workplace injuries. It usually includes employer's liability insurance to protect against lawsuits from injured workers.

Businesses with employees typically must purchase workers' comp to comply with state requirements and avoid penalties. For example, all real estate businesses in California, Pennsylvania, and New York must carry workers' comp if they have one or more employees. Florida businesses need coverage when they have four or more employees, and coverage is optional in Texas.

Since health insurance plans can deny claims for injuries related to your job, workers' comp coverage is also recommended for independent contractors as a financial safety net and for peace of mind.

The cost of workers' comp depends on several factors, primarily the number of employees you have and their occupational risks. You can save money on workers' comp coverage by classifying your employees correctly and implementing a risk management plan to avoid work-related injuries and subsequent claims.

Real estate agents and brokers pay an average of $162 per month, or $1,948 per year, for commercial auto insurance.

This type of insurance pays for legal costs and medical bills if your company vehicle injures someone or damages their property in an accident. It can also cover vehicle theft, vandalism, and weather damage.

Most states require commercial auto insurance for vehicles owned by a real estate business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.

The cost of commercial auto insurance depends on several factors, including your policy limits, the coverage options you choose, the number and value of your vehicles, and the driving records of anyone permitted to drive.

Real estate agencies spend an average of $58 per month, or $692 per year, on cyber insurance. This policy is also called cyber liability insurance or cybersecurity insurance.

Cyber insurance helps your business recover financially after a cyberattack or data breach. It can cover data breach investigations, cyber extortion payments, and costs related to complying with your state's data breach laws.

A cyber liability insurance policy is especially crucial for real estate businesses that store sensitive client information, such as credit card numbers, Social Security numbers, and email addresses.

The cost of cyber insurance and the coverage you need depend on the amount of sensitive information you handle at your real estate firm.

Real estate professionals pay an average of $95 per month, or $1,140 annually, for commercial umbrella insurance. This policy helps boost the limits of your underlying general liability, commercial auto, or employer's liability insurance.

Umbrella insurance provides an additional safeguard and helps policyholders meet contractual demands for higher limits. When the underlying policy reaches its limit on a covered loss, commercial umbrella insurance activates to cover any costs over that limit, up to the limit of your umbrella policy.

The cost of commercial umbrella insurance depends primarily on the amount of coverage you purchase.

Real estate agents and brokers pay an average of $8 per month, or $100 per year, for a surety bond.

A surety bond provides reimbursement for your client if you're unable to fulfill the terms of a contract or other agreement. You may need a surety bond to obtain certain types of client contracts or to get licensed in your state.

The cost of a surety bond primarily depends on the size of the bond.