Exclusive buyers’ agencies are real estate agencies that only represent the buyer in a real estate transaction. This means that they never represent sellers or take listings, and as a result strictly represent the interests of their buyer clients. Exclusive buyers’ agencies won’t get caught representing both sides and won’t have a conflict of interest by representing both the buyer and seller in the same transaction.
Buyers’ agencies have an exclusive fiduciary duty to their buyers. Their clients have a reasonable expectation, then, of enhanced loyalty, confidentiality, skill, care, and appropriate and accurate disclosures.
If you own an exclusive buyers’ agency, you are likely to work for a diverse set of clients who have a similar goal of purchasing a home or property at the best terms, value, and conditions. Your agency is subject to numerous business risks, from typical property and physical injury risks in your office, to serious financial risks if a client or someone else sues you if you make an error.
Exclusive buyers’ agency insurance can help you cover many of your risks and avoid devastating financial losses if you’re sued. An independent insurance agent can help you find insurance companies that specialize in business insurance for unique real estate agencies like yours.
Why Do You Need Exclusive Buyers’ Agency Insurance?
Exclusive buyers' agents are licensed real estate professionals who work only with home buyers and may even have a higher level of industry education and licensing. If you operate an exclusive buyers’ agency, you operate an office, manage a group of exclusive buyers' agents, and take on all of the risks involved with running a business.
Your clients place a great deal of trust in your professionalism and expertise. Buying a home or property is a stressful and vitally important undertaking for anyone. Unfortunately, there are many ways in which errors are made or other problems occur, and if a client loses money or is otherwise harmed, you can expect to take the blame.
If you own an exclusive buyers’ agency, you need tailored business insurance policies to ensure that you can weather the storm of any claims against you, whether or not the claims have merit. Without comprehensive insurance coverage, your entire livelihood could be at risk.
Professional Liability Insurance for Exclusive Buyers' Agencies
Your clients place a great deal of trust in your expertise and abilities. You regularly provide guidance on how much a client should offer for a property, negotiate on the buyer’s behalf in order to secure the best price and terms, and design contracts with your client's best interests in mind.
But at any time you could provide wrong advice, miss an important detail, transpose a number, or commit some other type of error that leads to a financial loss for one of your clients.
That’s why you need professional liability insurance, or errors and omissions (E&O) insurance, for your exclusive buyers' agency. If your client thinks you’ve made a mistake that has cost them financially, you may be sued. Professional liability insurance covers the costs of lawsuits related to your professional advice or services, whether you are sued by an overly litigious client (you still have to defend yourself if the claim is unfounded!) or if you are truly negligent.
What might lead to a professional services lawsuit? Exclusive buyers' agencies can be sued based on:
- Actual or alleged errors
- Professional negligence
- Breach of duty
- Misleading statements
- Claims resulting from the performance or non-performance of professional services
If a client loses money because of one of your errors or omissions, your chances of being sued are high.
Professional liability insurance provides a financial shield. It protects real estate professionals, their partners, their employees, and the partnership or corporation from damages caused by failing to provide professional services. It is needed for these types of claims in order to pay defense costs as well as any settlements or judgments rendered against you.
Because of the wide variation in the types of businesses or professions that need E&O coverage, there is neither standard policy language nor a one-size-fits-all solution. Your exclusive buyers' agency professional liability policy should reflect your needs and address the unique exposures you face.
General Liability Coverage for Exclusive Buyers’ Agencies
Like any other small business, you need general liability insurance to protect you from other sources of lawsuits.
Commercial general liability (CGL) insurance provides broad coverage for lawsuits that may be filed against your business. CGL insurance covers third-party bodily injury and property damage claims against your agency. It helps you pay for direct costs related to a claim (e.g., medical expenses, repairing or replacing damaged property) as well as your legal defense if you are sued. (Note: General liability insurance excludes coverage for professional liability claims.)
Because you regularly have members of the general public (customers, vendors, delivery persons, cleaning crew) on your business premises, this coverage is essential. If someone trips and falls at your office and is injured, they may sue you for damages. The CGL policy will pay for attorney fees, court costs, and even settlements or court-ordered judgments.
And if you damage someone else’s home or personal property while showing it to one of your buyers, your CGL policy offers coverage here as well.
Commercial Property Coverage for Exclusive Buyers’ Agencies
Whether you own your building or lease your office space, you need some type of protection for your business property. Commercial property insurance covers damage to a building and its contents (computers, office equipment and furniture, supplies, fixtures, etc.) if it is damaged by a weather event, fire, theft, vandalism, or other causes of loss.
Most business property policies also offer coverage for business interruption, which helps you pay for ongoing expenses if you must temporarily close or relocate due to a covered property loss (e.g., a fire).
Additional Exclusive Buyers’ Agency Insurance
Talk to your independent insurance agent about your need for the following additional types of insurance for your exclusive buyers' agency. Some may be purchased as stand-alone policies, while others can be added as endorsements to a basic business liability or property policy.
- Computers and media coverage—also called electronic data processing (EDP) insurance—pays for lost data and related lost income if your computers or network are damaged by theft, vandalism, viruses, or malware. It may pay for loss of data or software and physical damage to computers or hardware.
- Cyber liability insurance provides coverage in the event of a data breach involving your business. It helps pay for the costs of notifying affected clients, as well as legal fees, public relations costs, and investigative costs.
- Commercial auto insurance covers any vehicles your company owns. It provides liability coverage if you or an employee injure someone or cause property damage while driving a company vehicle. If your agents drive personal vehicles for business purposes (e.g., while showing homes or traveling to various property tours) you must have non-owned or hired auto liability coverage to protect your company from accident-related costs.
- Workers’ compensation insurance is typically required for any business that has employees, and pays for lost income and medical expenses for employees who are injured on the job.
- Employment practices liability insurance provides coverage for violations of anti-discrimination regulations. It protects a business owner if a prospective, current, or former employee sues based on discriminatory employment practices.
- Directors and officers (D&O) liability insurance provides protection for directors and officers of companies against legal judgments and costs arising from unlawful acts, erroneous investment decisions, failure to maintain property, releasing confidential information, hiring and firing decisions, conflicts of interest, gross negligence, and errors of many other types. It is recommended for directors and officers who are accountable to investors, shareholders, creditors, employees and customers.
- Commercial umbrella insurance provides liability protection above and beyond the liability coverage included in a commercial general liability and business auto policy. A commercial umbrella policy would pay when your other liability coverage has been exhausted.
How Much Does Exclusive Buyers’ Agency Insurance Cost?
The cost of exclusive buyers’ agency insurance depends on several factors, including the size of your business and the types of policies you need to cover all of your unique risks.
With so many variables (e.g., number of employees, physical assets of varying types and values, the location and size of your building or office space, the potential for errors and omissions), business insurance costs will vary among exclusive buyers’ agencies.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need to protect your exclusive buyers' agency from a variety of costly problems. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Insurance Agent
Independent insurance agents simplify the search process for finding the right exclusive buyers’ agencies insurance. They’ll walk you through some handpicked policy options and explain the details and options.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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