Workers' compensation insurance for real estate businesses

Whether at the office or on-site at a property, your employees are susceptible to work-related injuries. The cause could be as simple as moving heavy furniture or tripping on an uneven step. Even a minor injury can result in medical bills and time taken off work.

Workers’ compensation insurance provides coverage in three primary areas:

• Employee medical expenses
• Employee injury lawsuits
• Compliance with state laws

A workers' compensation insurance policy provides important financial support for real estate sales agents or other professionals who are injured or become ill because of their work.

It can help pay for medical expenses related to a work injury, including emergency treatment, hospital visits, and ongoing care such as physical therapy.

If an employee is unable to work while recovering, workers' comp can also provide disability benefits and replace a portion of their lost wages. In the event of a fatal workplace accident, the policy may provide death benefits to the employee's family.

Whether real estate business owners need workers' compensation insurance depends on state law and how the business is structured. Even when coverage isn't required, it can provide valuable financial protection.

Personal health insurance may not cover injuries that occur while performing work-related duties, leaving business owners responsible for medical expenses out of pocket. Workers' compensation can help cover those costs, along with a portion of lost income if a real estate broker is unable to work while recovering from a covered injury.

Most workers' compensation policies also include employer’s liability insurance, which can help protect a real estate business if an employee files a lawsuit over a work-related injury or illness. This coverage can help pay for attorney fees, court costs, settlements, and judgments, reducing the financial impact of a costly legal claim.

For example, an employee could file a lawsuit after being injured while setting up an open house or showing a property if they believe unsafe working conditions contributed to the accident.

In most states, real estate businesses must provide workers’ compensation insurance as soon as they hire their first employee. Without this policy, you could face fines, payments to a state uninsured employers fund, or even jail time.

Each state has its own laws for workers’ compensation requirements. For example, every real estate business in New York must carry workers’ compensation for its employees—even part-time workers. However, Alabama businesses are only required to carry workers’ compensation when they have five or more employees.

Sole proprietors, independent contractors, and partners don’t have to carry workers’ compensation insurance or remain self-insured, but you can purchase a policy to protect yourself, too. It's a good idea to carry this coverage, as health insurance providers can deny claims related to your job.

In certain states, real estate businesses must purchase coverage through a monopolistic workers' comp state fund. Those states are:

• North Dakota
• Ohio
• Washington
• Wyoming

If you purchase workers’ comp through a monopolistic state fund, it might not include employer’s liability insurance. However, you can purchase it as stop gap coverage from a private insurance company.

The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your workers' comp premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).

The formula providers use in underwriting to calculate workers' comp rates is:

Even office workers are at risk for an injury. They could slip on a wet floor or trip over a power cord. If an employee is injured on the job, it could lead to an insurance claim and a rise in your premiums.

Business owners can mitigate risks by providing safety training and eliminating hazards such as loose rugs, clutter, and dim lighting. Taking these steps could reduce workplace injuries and help keep your insurance rates low.

While workers’ compensation protects your employees, and to some extent, your business, it doesn't provide complete protection. Because accidents can happen in any real estate profession, some other policies to consider include:

General liability insurance: A general liability policy covers common business risks like customer injuries, damage to a customer’s property, and advertising injuries.

Commercial umbrella insurance: Umbrella insurance provides additional coverage for liability claims made on your general liability, commercial auto, or employer’s liability insurance, once a policy's limit is reached.

Business owner's policy (BOP): A BOP combines general liability coverage with commercial property insurance, typically at a lower rate than buying the policies separately.

Commercial auto insurance: This policy covers business-owned vehicles. It typically pays for accidents and damages related to theft, weather, and vandalism.

Cyber insurance: Also called cybersecurity insurance, this type of coverage helps real estate businesses survive cyberattacks and data breaches by paying for recovery expenses and other associated costs.

Errors and omissions insurance: Also called professional liability insurance or E&O, this policy can cover legal fees of lawsuits related to a real estate professional's business decisions.

Lessor's risk only (LRO) insurance: This policy protects commercial landlords from tenant lawsuits over property damage and injuries.

Surety bonds: Real estate professionals sometimes need a surety bond to get licensed in their state. It acts as a financial guarantee they'll comply with contract terms and regulations.

Are you ready to safeguard your real estate business with workers' compensation insurance?

Simply complete Insureon’s easy online application today. We partner with top-rated U.S. insurance companies to get you the best workers' comp insurance. You can also consult with an insurance agent on the types of business insurance you need, and how to get affordable workers' compensation coverage within your budget.

Once you find a policy that fits your needs, you can begin coverage and access your certificate of insurance (COI) in less than 24 hours.