How much does real estate agent and broker insurance cost?

Real estate agents and brokers pay an average of $59 per month, or $708 annually, for errors and omissions insurance (E&O), also called professional liability insurance. 

E&O covers the cost of client lawsuits over claims that your work was negligent, late, never completed, or otherwise unsatisfactory. Some states require real estate professionals to carry this policy.

For example, suppose a buyer claims their real estate broker misrepresented the listing and decides to sue. An errors and omissions policy would cover your legal fees, settlement, and other financial losses.

Below is the average cost of E&O insurance for realtors and brokers who buy from TechInsurance:

Premium: $59 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000

A variety of factors influence the cost of real estate E&O coverage, including your business type, claims history, and the policy limits you choose. You can save money on your policy by choosing lower limits or a higher deductible.

Reducing your risks also helps you avoid claims and lower your costs. This includes clear communication with clients and proper documentation throughout the whole process.

Real estate agents and brokers pay an average of $33 per month, or $400 annually, for general liability insurance, also called liability insurance.

General liability insurance protects against third-party small business risks, such as a client falling on a broken stair at an open house and suffering a bodily injury, or accidental damage to a client's property.

This insurance covers attorneys' fees and other legal defense costs if someone sues your business over advertising injuries, such as copyright infringement or defamation.

The average general liability policy for real estate firms that purchase from TechInsurance:

Premium: $33 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The per-occurrence limit is the maximum amount your insurance provider will pay for a single covered incident. The aggregate limit is the most the insurance provider will pay for all claims during the policy period (usually one year).

General liability insurance costs can vary based on different factors, including the coverage limits and deductible you choose, your business size, the types of professional services you provide, your annual income, and any additional insured endorsements you choose to add.

Real estate professionals pay an average of $58 per month, or $692 per year, for a business owner’s policy (BOP).

A BOP bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property, and typically costs less than purchasing each policy separately. This bundle protects your business against customer property damage and injuries, vandalism, and damage to your real estate equipment.

The average BOP for real estate businesses that buy from TechInsurance:

Insurance premium: $58 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Small, low-risk real estate firms are often eligible for a business owner's policy.

Medium-sized and/or higher-risk businesses should consider a commercial package policy (CPP). A CPP also combines your general liability coverage with property insurance, but offers more flexibility than a BOP. 

The CPP policy cost for real estate agents and brokers is $278 per month, or $3,330 per year.

Endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help prevent financial losses if a fire or power outage forces your business to cease operations for an extended period.

The cost of a business owner's policy is based on various factors, including the value of your business property, your location, your annual income, your industry, and how many employees you have.

Workers’ compensation insurance costs an average of $41 per month, or $489 annually, for real estate agencies and brokerages.

This policy covers medical expenses and lost wages related to workplace injuries. Workers' comp typically includes employer's liability insurance to protect against lawsuits from workers who sue over their injuries.

Most businesses that hire staff must purchase workers' comp to comply with state requirements and avoid penalties.

For example, all real estate businesses in New York, California, and Pennsylvania must purchase workers' comp if they have one or more employees.

In Florida, businesses with four or more employees need coverage. Coverage in Texas is optional, though employers may be liable to pay out-of-pocket if employees are injured.

Independent contractors are encouraged to purchase workers' comp as well, even though it's typically not required. This is because health insurance plans can deny claims for injuries related to your job.

The cost of workers' comp depends on several factors, including the number of employees you have and their work risks.

You can save money on workers' comp coverage by classifying your employees correctly and ensuring you're regularly engaging in risk management to avoid work-related injuries and medical claims.

Real estate professionals pay an average of $162 per month, or $1,948 per year, for commercial auto insurance.

A commercial auto policy pays for legal costs and medical expenses if your company vehicle is involved in an accident that results in injuries or property damage. It typically also covers vehicle theft, weather damage, and vandalism.

Most states require commercial auto insurance for business-owned vehicles.

For personal, rented, or leased vehicles used for work purposes, consider hired and non-owned auto insurance (HNOA) instead, as a standard commercial auto policy will not cover any vehicle that isn't owned by the company.

The cost of commercial auto insurance depends on various factors, including the policy limits you select, your coverage options, the number and value of your vehicles, and the driving records of anyone permitted to drive.

Real estate businesses spend an average of $58 per month, or $692 per year, on cyber insurance, also known as cyber liability or cybersecurity insurance.

Cyber insurance provides financial assistance to your business after a cyberattack or data breach. It covers cyber extortion payments, data breach investigations, and expenses related to complying with your local data breach laws.

A cyber insurance policy is necessary for real estate companies that store sensitive client information, such as names, email addresses, home addresses, credit card details, and Social Security numbers.

The cost of cyber insurance depends largely on the amount of sensitive information you handle at your real estate business.

Commercial umbrella insurance costs an average of $95 per month, or $1,140 annually, for real estate agents and brokers. Umbrella insurance helps boost the limits of your primary general liability, commercial auto, or employer's liability insurance.

When a small business owner's underlying policy reaches its limit on a covered loss, commercial umbrella insurance activates to cover any costs over that limit, up to the limit of your umbrella policy.

Umbrella coverage offers an extra financial safeguard and helps policyholders meet contractual demands for higher limits when necessary.

The cost of commercial umbrella insurance depends primarily on the amount of coverage you purchase.

Surety bonds cost real estate agents and brokers pay an average of $8 per month, or $100 per year.

Surety bonds provide reimbursement payments for your client if you're unable to fulfill the terms of a contract or agreement.

Some clients may require a surety bond before they agree to sign a contract or work with you. You may also need it to become licensed in your state, depending on your industry and licensure requirements.

The cost of a surety bond depends mostly on the size of the bond you choose to purchase.