Michigan’s housing market has rebounded from the recession. High demand and a highly constrained inventory are pushing up home values in areas such as Grand Rapids and Detroit and driving fierce bidding wars. The demands of a seller’s market can be stressful for Michigan real estate agents and brokers. Choosing insurance for your small business doesn’t have to be.
Every piece of real estate that you work with has its own challenges and risks. The same is true for your business, so it’s important to consider your risk and key business factors when choosing insurance to protect your realty business. Do you plan to move into commercial space? Most leasing agreements require proof of general liability and/or commercial property insurance. Potential clients may ask for proof of professional liability insurance. Also called errors and omissions or real estate agent liability insurance, this policy can assist with legal costs if you are sued due to a business error. Real estate agents and brokers are not required to hold this policy under Michigan state law, though it may be prudent to do so. Michigan state law does require all small businesses with three or more employees, or one employee working 35 hours a week for 13 weeks, to carry workers’ compensation insurance.
Insureon makes shopping for insurance easy with industry-leading technology that gathers quotes from top U.S. carriers that fit your needs. Read more to find out which policies are most common for real estate professionals in Michigan, 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 and brokers vary depending on a range of factors, including revenue, client contracts, and partnerships. The table below illustrates which policies might work best for your business type.
||General liability / BOP
|1099 or independent contractor
|Business owner with employees
|Solo business owner
General liability insurance: General liability insurance is the foundation of a real estate professional’s business protection. Coverage 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 and brokers 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.
Cyber liability insurance: Cyber liability insurance helps real estate agents and brokers survive data breaches and cyberattacks by helping with recovery expenses. You may need this policy if you handle sensitive data such as credit card numbers, passwords, or Social Security numbers.
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.
Michigan workers' compensation insurance: 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 insurance. 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. While those in the real estate industry face a lower risk of workplace injury than those working in construction or manufacturing, injuries do happen. Nationally, real estate agents and brokers miss a median of 12 days of work due to workplace injury each year, four more days than the national median, according to data from the Bureau of Labor Statistics. Agents and brokers most commonly sustain injuries resulting from contact with equipment or falls, slips, and trips.
Business insurance costs for real estate agents and brokers in Michigan
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. The legal costs of errors and omissions lawsuits against real estate professionals can range from a few thousand dollars up into the mid-hundred thousands. In all, real estate professionals in Michigan can expect to spend less than $200 per month to secure their small business.
Save time and money with Insureon
Insureon’s industry-leading technology helps real estate agents and brokers in Michigan 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 needs. Our insurance specialists are licensed in Michigan 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 and broker insurance quotes today.