Insurance for Real Estate Appraisers

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Why Real Estate Appraisers Need Insurance

There are more than 85,000 real estate appraisers across the United States, and The Bureau of Labor Statistics predicts that number to grow. Real estate appraisers assess the value of homes, buildings, and complexes and have the power to make or break any sale. Actively working with the public and making recommendations to lending sources opens the doors risk, lawsuits, and claims. The only way to fully protect yourself is to buy real estate appraiser insurance.

Companies in this industry estimate the fair market value of real estate.

Risks Real Estate Appraisers Could Face

At first glance, some may think real estate appraisers face little or no risk, but that is not the case. Risks you face include:

  • Unhappy Customers: You are an expert at determining real estate value. But, you’re not perfect. If you calculate a home value that causes a seller to lose money and they file a lawsuit alleging miscalculations, you can be required to pay their loss.
  • Bad Recommendation: The basis of your business is to give advice. In some cases, appraisers offer advice to sellers on how much they can list their home for on the market. If your advice is wrong, they can hold you accountable for the difference in listing price an actual value later on.
  • Injury: Appraising homes and buildings requires you to visit the property, walk through, and analyze what you see. During a typical walk through, you trip and knock over an armoire of valuable china. You are responsible for replacing the damaged items.
  • Auto Accident: Roadways, highways, and other drivers are unpredictable. Sometimes you have the best intentions driving to a property but can end up in a car accident. If you are at fault for the accident, your appraisal business can end up responsible for significant expenses.

Types of Coverage Real Estate Appraisers Need

If you own a real estate appraisal business, you need general liability and commercial property insurance to cover the basics. Some appraisers are required to carry appraiser E&O insurance. Since you drive to the appraisal location, you also need business auto insurance.

  • Errors & Omissions: Appraiser E&O insurance is also referred to as professional liability, this policy pays to defend you when a customer alleges you made an error or gave bad advice. It also pays any required settlement costs that result from a lawsuit.
  • Business Auto: Covers driving accidents in the event you cause an accident on the road or back into another vehicle in a parking lot or driveway. It pays costs to repair your vehicles as well as another person’s property. If you use personal vehicles, make sure you have hired and non-owned auto insurance in place as well. Everyday driver policies won’t pay claims if a vehicle was used for business purposes.
  • Cyber liability: This is crucial if you store sensitive client information. It assures you abide by state notification laws, pays for investigations, and covers expenses that a third-party accumulates when your files are breached.
  • General Liability: This is typically thought of as a slip and fall policy. In addition to that, it also covers any damage you cause to an individual or businesses’ property while performing services.

How Much Does Real Estate Appraiser Insurance Cost?

Calculating insurance costs for real estate appraisers varies from company to company. They each have a unique set of insurance requirements, but most underwriters want to review your experience, past claims history, and what types of appraisals you offer. You can calculate insurance costs including E&O insurance cost by filling out our online application today.

What type of insurance does this industry need?

Policy What is it? Why get it Popularity in your industry Want free quotes?
Professional Liability
This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to a mistake or error made in a professional capacity. Your business may have contracts with clients or partners that require Professional Liability coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, Professional Liability coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.

What is it: This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to a mistake or error made in a professional capacity.

Why get it: Your business may have contracts with clients or partners that require Professional Liability coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, Professional Liability coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.

Errors & Omissions (E&O)
This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to an error or omission on your part. Your business may have contracts with clients or partners that require E&O coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, E&O coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.

What is it: This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to an error or omission on your part.

Why get it: Your business may have contracts with clients or partners that require E&O coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, E&O coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.

General Liability
This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

What is it: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy.

Why get it: General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

Commercial Property
This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

What is it: This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage.

Why get it: If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

Workers Compensation
Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

What is it: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work.

Why get it: Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

Commercial Auto
Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage. Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

What is it: Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage.

Why get it: Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

Umbrella Insurance
Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits. This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.

What is it: Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits.

Why get it: This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.

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