As a real estate appraiser, you face the task of accurately evaluating the value of real estate for mortgage loans, tax assessments, and more. Both lenders and buyers rely on your expertise and skill to provide an accurate appraisal. When evaluating a multitude of properties, it’s possible to make errors. That’s why it’s imperative that you be covered by the right business insurance.
An independent insurance agent can assist you in evaluating the risks you encounter in your appraisal business so you can choose the proper coverage. The find-an-agent tool will match you up with a local agent ready to help.
Why Do You Need Business Insurance as a Real Estate Appraiser?
Despite your experience and attention to detail when you do your job, it’s still possible for mistakes to be made. Business insurance protects you against potential claims for damage. Here are some potential scenarios you could face:
- You could make an error in the appraisal of someone’s home.
- You could cause damage to someone’s property during the evaluation.
- If you have appraisers that you employ, one could get injured while evaluating a property.
While many scenarios seem unlikely, unfortunately accidents happen; you need to be prepared for anything.
What Kind of Insurance Do You Need as an Appraiser?
According to The Insurance Journal, 75% of businesses in the US are underinsured by 40% or more. Carrying the right coverage can protect you from devastating financial losses.
Commercial General Liability (CGL)
A CGL policy is an important part of your overall risk management strategy. If you are found liable for damage resulting from your normal business operations, you could be responsible for a large chunk of money. If you are assessing a property and break some roof tiles, a CGL would cover this. There are three components of commercial general liability insurance:
- Bodily injury and property damage liability
- Personal and advertising injury
- Medical payments
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Errors & Omissions
In many states, errors & omissions (E&O) insurance is required, so check with your state to see if you must carry this insurance by law. Even without the legal requirement to carry errors & omissions insurance, you should strongly consider it.
E&O insurance will cover costs for legal defense and damages when claims are made against you up to the limits of your policy. As an appraiser, it is wise to carry errors & omissions insurance in case you provide an incorrect valuation on a piece of real estate. Everyone is human and prone to errors.
If you have appraisers working for you as your employees, carrying workers' compensation insurance can save you and your employees from a lot of damage. Workers' comp protects you if one of your employees is injured on the job. Each state has different laws regarding workers' compensation coverage, so check with yours to verify.
Hired and Non-Owned Auto (HNOA)
Hired and non-owned commercial auto insurance is a great option for businesses or professionals that use their personal vehicles or rental vehicles for business operations like driving to appointments, errands, etc. Generally, a hired and non-owned auto policy covers liability claims as well as legal costs like attorney fees and settlements.
Cyber Liability Insurance
Though you might initially think your real estate appraisal business is too small to worry about cyberattacks, the reality is that no business is immune. Small businesses that don’t have the same level of cybersecurity as many larger businesses are especially at risk for potential attacks.
National Small Business Association survey
Available cyber liability coverages include:
- Data breach response and liability
- Computer attacks
- Network security liability
- Media liability
- Funds transfer fraud
- Cyber extortion
An independent insurance agent can help you evaluate your level of risk for cyberattacks and provide you with a strong recommendation for coverage.
How Much Will Business Insurance Cost Me as a Real Estate Appraiser?
Business insurance is never a one-size-fits-all solution. Factors like the size of your business, limits of liability, and other risk factors will determine the cost of your premiums. Independent insurance agents know that small business owners are in need of affordable insurance and can help you find the right price.
The Benefits of an Independent Insurance Agent
Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility and competitive pricing while working entirely for you. As your needs change, they'll be there to help you adjust your coverage, up or down, to make sure you're properly protected without overpaying.
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