Business Insurance Requirements for Real Estate Agents in California

With short supply and soaring prices in many metro areas and surrounding communities, California real estate agents face the unique challenges of running a small business combined with the added pressure of working in an aggressive market. Business insurance for your agency should not be one of your worries.

The key to building an insurance plan that best protects your business is to consider your risks and some key business factors. Will your business require commercial space? Most leasing agreements require proof of general liability insurance and/or commercial property insurance. Some clients may ask for proof of professional liability insurance before moving forward with your services. Also called errors and omissions or real estate agent liability insurance, this policy can protect companies when lawsuits are filed as a result of a business discrepancy. California state law also requires all businesses with employees to carry workers’ compensation insurance, which generally offsets lost wages and medical expenses resulting from a workplace injury.

Insureon makes shopping for insurance easy with industry-leading technology that gathers quotes from top U.S. carriers to fit your business needs. Read more to find out which policies are most common for real estate agents and brokers in California, and start an application to get your free quotes today.

Find the right insurance policy for your realty business

The most common policies for real estate agents depend on a number of factors, including revenue, client contracts, and partnerships. The table below illustrates which policies might work best for your business structure.

 

Business type General liability / BOP Professional liability Workers' comp
Solo business owner X X  
Contractor / freelancer X X  
Business owner with employees X X X

 

General liability insurance: General liability insurance is the foundation of a real estate agent’s business protection, with coverage that extends to bodily injury, client property damage, advertising injury, and the cost of legal defense. Most commercial leases require you to have this coverage.

Professional liability insurance: Many clients require proof of professional liability insurance before entering contracts for professional services. This policy, also called errors and omissions insurance or real estate agent liability insurance, can help cover legal expenses if you’re sued for unsatisfactory work or a business discrepancy.

Business owner's policy (BOP): Real estate agents sometimes qualify for a business owner’s policy. This package helps your business save money by bundling commercial property insurance with general liability at an affordable rate.

Commercial auto insurance: Commercial auto insurance can cover vehicles your business owns or uses for business purposes. If your vehicle is involved in an accident, this policy can cover your liability for the other person's bodily injuries and property damage. It can also pay to repair your car when it is damaged by theft, weather events, and vandalism.

Cyber liability insurance: Cyber liability insurance helps real estate brokers survive data breaches and cyberattacks by helping to cover recovery expenses. You may need this policy if you handle sensitive data such as credit card numbers, passwords, or Social Security numbers.

California workers' compensation insurance: California state law mandates workers’ comp coverage for all small businesses with employees. This applies to part-time and full-time employees as well as family. While workplace injuries in the real estate industry in the United States are less common than more hazardous fields, injuries do occur. Real estate agents are at particular risk of injuries resulting from falls or contact with equipment, according to data from the Bureau of Labor Statistics.

Business insurance costs for real estate agents in California

Median insurance costs for real estate agents in California are on par with the national rate, according to an analysis of Insureon applications. Errors and omissions coverage, a key policy for agents, costs $1,147 per year ($96/month) for California agents, a difference of $3 from the national annual median of $1,150. This policy offers financial protection for costly professional negligence claims. The cost difference is most notable for general liability. California real estate agents typically pay $760 per year for this coverage, whereas agents around the country may pay closer to $592 per year.

Median Business Insurance Costs for California Real Estate Agents

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 dozens of top U.S. carriers. Simply apply online and review quotes for the policies that best fit your business. Our insurance specialists are licensed in California and can answer your questions as you consider coverage.

To make the application go even 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 insurance quotes today.