Learn about business insurance requirements and the most common policies for real estate agents and brokers in California.
Which policies are required for real estate agents and brokers in California?
If you have a commercial lease, your property manager may require you to purchase general liability insurance. Commonly purchased by real estate agents and brokers in California, general liability insurance can protect your business from expenses associated with common mishaps, such as client property damage and injuries.
Your clients may require errors and omissions insurance in a contract. Also called professional liability insurance, errors and omissions insurance provides financial protection if a client files a lawsuit claiming your work caused financial harm because it was late, erroneous, or incomplete. Though E&O insurance is not required in California, this policy provides crucial protection and some states require real estate agents and brokers to carry it.
State law in California requires every small business with employees to provide workers’ compensation coverage, and business-owned vehicles must be covered by commercial auto insurance. Personal vehicles used for business purposes should have commercial coverage, as well.
What are the most common policies for a real estate agent or broker in California?
The most common policies for real estate agents and brokers in California vary depending on revenue, client contracts, partnerships, and other factors.
General liability insurance
General liability insurance is the foundation of a real estate agent or broker’s business protection, with coverage that extends to client injuries, client property damage, and advertising injuries. Most commercial leases require you to have this coverage.
Errors and omissions (E&O)
Many clients require proof of errors and omissions insurance before entering into contracts for professional services. This policy, also called professional liability insurance, can help cover legal expenses if a real estate agent or broker is sued for unsatisfactory performance or a work mistake.
California workers' compensation
California state law mandates workers’ compensation coverage for all small businesses with employees. This applies to part-time and full-time employees as well as family. If you are a sole proprietor, the coverage is optional. Workers' compensation can pay for medical expenses and cover part of the wages lost from a work-related injury or illness.
Business owner's policy (BOP)
Real estate agents and brokers often qualify for a business owner’s policy. This package helps your business save money by bundling commercial property insurance with general liability insurance at an affordable rate.
Commercial auto insurance
Personal auto insurance policies typically exclude business use, which means you could end up paying for an auto accident if it happens on a work errand with your personal vehicle. Commercial auto insurance is required for vehicles owned by real estate companies. Hired and non-owned auto insurance covers personal vehicles used for business purposes.
Cyber liability insurance
Cyber liability insurance can help real estate agents and brokers survive data breaches and cyberattacks experienced by your company. Many professional liability policies include this coverage, but check with your licensed Insureon agent to make sure.
What do real estate agents in California pay for business insurance?
Median insurance costs for real estate agents in California are on par with the national median, according to an analysis of Insureon applications. Errors and omissions coverage, a key policy for agents, costs $1,147 annually ($96 monthly) for California agents, almost exactly the same as the national median. The cost difference is most notable for general liability insurance. California real estate agents can expect to pay $760 annually for general liability, while the national median premium is $592.
Save time and money with Insureon
Insureon’s industry-leading technology helps real estate agents and brokers in California save time and money shopping for insurance by comparing policies from top U.S. carriers. Start a free online application to review quotes for the policies that best fit your business. Our insurance agents are licensed in California and can answer your questions as you consider coverage.
To make the application go quicker, have this information ready:
- Workforce details, such as the number and types of employees
- Current and projected revenue
- Business partnerships
- Insurance history and prior claims
- Commercial lease insurance requirements
Apply for free real estate agent and broker insurance quotes today.