Learn about business insurance requirements and the most common policies for real estate agents and brokers in Michigan.
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 Michigan, 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 Michigan, some states require real estate agents and brokers to carry it.
Michigan state law requires all small businesses with three or more employees, or one or more employees working 35 hours a week for 13 weeks, to carry 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.
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.
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.
If you own a real estate agency or brokerage in Michigan, you are required to carry workers’ compensation coverage if you have three or more employees, or one or more employees working 35 hours a week for 13 weeks. Independent contractors are not considered employees for workers’ comp purposes. If an employee is injured on the job, workers’ comp can help pay for medical fees and lost wages. Insurance can be purchased through Michigan’s competitive state fund or through a private insurer.
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.
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 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.
Business insurance costs for real estate professionals in Michigan deviate in both directions from the national median, according to an analysis of Insureon applications. With a median cost of around $120 per month, errors and omissions coverage costs significantly more in Michigan than the national rate. It may be tempting to go without this coverage, as it’s not required by state law. However, any short-terms savings could evaporate if you face a lawsuit.
Though E&O costs more in Michigan, real estate professionals can expect to save money on general liability insurance and workers' compensation. In all, real estate professionals in Michigan can expect to spend less than $200 per month to secure their small business.
Insureon’s industry-leading technology helps real estate agents and brokers in Michigan 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 Michigan and can answer your questions as you consider coverage.
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