Why You Need Calgary Real Estate Insurance
Professional Insurance Coverage for Real Estate Agents, Realtors and Brokers
Calgary is absolutely bursting with potential, especially when it comes to the real estate market. With skill and persistence, a qualified real estate professional can really make their mark on this city in a big way. But as the old saying goes, without risk there is no reward—and all that potential for success comes with the potential for disaster as well.
That's where a robust Calgary real estate insurance policy comes in. The right coverage package will offer you financial protection for situations beyond your control so you can avoid paying staggering amounts for legal expenses, settlement claim costs, medical fees, property damage reimbursements and more.
When you're conducting real estate business in Calgary, you can't just sit behind a computer all day. You need to get out there, meet your clients, see properties in person and do the legwork to make those sales. All that travelling and working in different locations—many of which you've never seen before—puts you at risk of crippling lawsuits related to property damage, third-party bodily injury, theft and other perils. At the same time, you are giving professional advice and dealing with important paperwork and financial details, which puts you at risk for legal action related to errors and omissions.
That's why it's so critically important to have the right Calgary real estate insurance solutions in place. When you speak with a Krywolt Insurance expert, we'll zero in on your unique needs and find the best possible package of insurance to ensure that you are protected against anything life throws your way, all at competitive rates.
Who Should Have Real Estate Insurance: Calgary, AB
When it comes to who exactly needs real estate insurance, Calgary, AB professionals need to understand how their specific insurance needs may differ from those outside the industry. Real estate professionals who work with residential, commercial or rural properties should all have Calgary real estate insurance, but they may need to invest in additional coverages that are specific to how they operate.
Professionals who need Calgary real estate insurance include:
- Real estate agents
- Realtors
- Brokers
- Brokerage owners
Rely on a local, experienced Calgary real estate insurance broker from Krywolt Insurance to complete a thorough review of your unique business practices and come up with an insurance package that will meet your coverage needs. That way, you can breathe easily knowing you won’t be on the hook for astronomical costs in the event that something goes wrong—or you're accused of something you didn't do and need to defend yourself in court.
What Coverage is Recommended for Calgary Real Estate Insurance?
There are some parts of real estate insurance Calgary, AB professionals absolutely have to have, and some coverage options that are recommended based on the specific details of how you operate your professional life. When your Krywolt Insurance broker has had the opportunity to learn more about you and your career, they'll be able to give you more information about what should be included in your unique Calgary real estate insurance package.
Professional Liability Insurance
Also known as errors and omissions insurance, or "E&O," professional liability coverage is a required part of Calgary real estate insurance. You might be the most careful and conscientious real estate professional in Canada, but even so, it's impossible to guard against and avoid every single mistake and mishap over the course of your professional life. Professional liability insurance protects you in the event that you make a mistake (an error) or forget to do something or fail to deliver a promised service (an omission), and claims are typically related to allegations that your services, products or employees caused financial damage.
For example, if you have a dissatisfied client who closes a deal and then gets buyer's remorse and claims you failed to act in their best interests, you could be sued for providing professional advice that didn't meet the clients' expectations. Or, if you sell a house that has hidden water damage—whether or not you were aware of it yourself—they could allege that you knew about the problem and failed to disclose it, leading to legal action against you to cover the cost of moisture damage mitigation. Your insurance provider will pay legal defense costs and settlements for legal claims that are related to a real or perceived financial loss resulting from your advice, actions or lack thereof.
Commercial General Liability Insurance
Almost all types of professionals in Calgary need commercial general liability coverage, and real estate agents, brokers and realtors are no exception to the rule. General liability insurance applies to situations that have resulted in third-party property damage to a building or item, third-party bodily injury or personal harm.
Say you were showing a house that was still under construction, and your client tripped over some tools or construction materials that were left lying on the floor. If they suffer an injury, you could be liable to cover their medical expenses and rehabilitation costs. Another example of a potential general liability issue is if you were assessing a client's property prior to sale and accidentally bumped into an expensive piece of artwork, sending it crashing to the floor and leaving you responsible for the replacement cost. In those types of scenarios where injury or damage happens on your watch, commercial general liability coverage will cover a certain amount of the costs incurred for medical bills, damage mitigation or replacement.
Commercial Property Insurance
If you operate your realty business out of a physical location in Calgary, it's important to have a commercial property insurance policy as part of your Calgary real estate insurance. That includes your home—if you work out of a home office, your homeowners insurance will not provide adequate coverage for contents related to your work practices. Business property insurance exists to protect you against out-of-pocket expenses for damage caused by perils such as fire, natural disasters and theft. It's very important to give your insurance broker plenty of information about the location of your building and perils that could befall it so they can make sure you are covered against the types of damage that are more likely to occur. For example, if your business property is located near the Bow River in a possible flood zone, it's a good idea to make sure flood damage is specifically included on your commercial property insurance policy.
Commercial Vehicle Insurance
Some people assume that commercial auto insurance is only necessary for industrial vehicles like delivery trucks or specialized service vehicles, but that's not the case. If you use your car or truck for professional purposes in Calgary, such as driving to a property so you can show it to a prospective client, you need commercial vehicle insurance on your Calgary real estate insurance package. This coverage will protect you against paying damages should you be involved in a collision or other incident with your vehicle. Depending on how your policy is written, it may also offer protection against issues such as theft, vandalism, hail damage, fire, flood and other non-driving related damage.
Cyber Insurance
Typewriters and landlines were certainly a lot less convenient than the laptops and mobile phones real estate professionals use nowadays—but there are some downsides to that comparison as well. Our modern, internet-connected devices expose us to perils that weren't even invented a decade or two ago, like hacking, ransomware and cyber extortion. Real estate professionals often play a fiduciary role to their clients, which necessarily involves handling sensitive information such as credit records, identity documents and more, and there are criminals out there right now looking for ways to take that information from you and ransom it back, or use it for fraudulent purposes.
If you are the victim of a cyber attack and your clients' information is stolen from you, you'll be in legal hot water unless you can safely recover what was lost. Cyber insurance will help you recover legal costs should you be sued, and may also be able to provide coverage for issues that result from a criminal using your network to spread malware, or the cost of restoring data after a major security breach. With some types of coverage, you can even recover partial costs for ransom payments to regain access to the lost information.
Crime Insurance
If your office in Calgary is the target of a "smash and grab" theft, you'll obviously know what happened right away and need to replace laptops and whatever else was taken. But theft isn't always so blatant. Employee fraud and theft can go undetected for years, racking up huge losses that are hurting your bottom line.
Whether it's perpetrated by a third party or a once-trusted employee, theft is a major issue for business owners and real estate professionals who handle money and property on behalf of their clients. If you have property, stocks or securities stolen from you—belonging to you or your clients—crime insurance coverage will help you recoup those losses and avoid taking a serious financial hit yourself, or avoid becoming the target of a lawsuit from a client looking to recover what was taken.
Other Types of Coverage You May Need
In addition to the Calgary real estate insurance coverage we have listed above, you may want to consider additional possibilities for your insurance policy such as:
- Mobile property insurance
- Business interruption insurance
- Equipment breakdown insurance
- Directors and officers insurance
Not sure which types are most necessary for your specific insurance needs? Our experienced brokers at Krywolt Insurance are happy to take the time to help you understand your options and find solutions that offer the greatest benefit to you.
Frequently Asked Questions About Real Estate Insurance
Is Real Estate Insurance Mandatory in Alberta?
All real estate industry licensees in Alberta are required to have professional liability insurance protection, which is also referred to as errors and omissions insurance. That is the coverage that will protect you from paying out of pocket if someone alleges that they suffered a financial loss because of your professional advice or services.
It is not mandatory in Canada for professionals to have general business insurance coverage such as commercial general liability, commercial property insurance and cyber insurance, but having a comprehensive Calgary real estate insurance package is a smart investment in your future success. You simply can't prevent every single mistake, mishap or disaster that might come your way, and paying your own funds to cover everything from water damage mitigation after a flood to medical bills for a third-party bodily injury is not remotely sustainable. With the right insurance in place, you can sleep soundly at night knowing you'll get the help you need to recover from financial setbacks and get back in the game stronger than ever.
How Much Does Calgary Real Estate Insurance Cost?
Because there's such a wide variation in what types of Calgary real estate insurance you may need to have included in your unique policy, there's no way to offer even a ballpark figure without knowing more about you and your business practices. The cost of your insurance premiums will vary according to factors such as:
- Type of coverage you need and want
- Your claims history
- Annual revenue
- Number of employees
- Qualifications and credentials of you and your employees
- Business location
- Building type
Once a Krywolt Insurance professional has had the opportunity to speak with you and learn more about your professional life, we can recommend a comprehensive Calgary real estate insurance package that will give you protection against financial losses during the moments when you need it most.
Researching healthcare and insurance benefits-related issues in Ontario and advising the OREA Board of Directors regarding the impact, including costs and benefits, to Members of the Ontario REALTOR® Wellness Program.
Source: orea.com
What Kind of Insurance Does a Real Estate Agent Need?
Known most commonly as either real estate or realtor insurance, this type of insurance is uniquely tailored to real estate agents. If you're looking for real estate insurance as a real estate agent, the policy must include coverage of your office and its contents. You will also want insurance that includes liability coverage, as it will help pay your legal expenses should you be sued.
As a real estate agent, you need the following types of insurance coverage:
- Commercial property
- Commercial general liability
- Professional liability
- Cyber liability
- Crime coverage
- Consumer deposit and commission protection.
What Kind of Insurance Should a Property Manager Have?
If you're a property manager or a property management company, then you must have specialized insurance for property management. What kind of coverage you have depends on whether you own the properties that you manage.
As a property manager or property management company, you should have the following coverage:
- Commercial property
- Commercial general liability
- Professional liability
- Cyber liability
- Director's and officers liability
- Crime coverage
- Equipment breakdown
Now, if you own a condominium or apartment building and also manage it, then you likely need a specialized commercial policy that's known as a master condominium policy.
What are the Four Major Types of Insurance for Realtors?
Real estate insurance comes in four major types. Each of these covers different stages and the unique risks involved at every stage. These insurance types help you to manage your real estate business and guard against a variety of risks.
1. Homeowner's Insurance
This is the most basic insurance policy required for your real estate business. Homeowner's insurance for a real estate business covers all of your basic needs and necessities that you need to keep your business functioning smoothly. As a real estate agent, you require several common mechanisms to properly run your business.
The insurance is called homeowner's insurance because you own a real estate agency. Consider your business' homeowner's insurance as if it's your business' home insurance.
Like any other business, your real estate business requires electronics and equipment to function properly daily. All of that adds up quickly and can be quite costly to replace. Thus, your homeowner's insurance for your business is a necessity for protecting these belongings from theft, damage, and other common threats.
Now, a standard homeowner's insurance policy probably won't provide enough coverage for your entire business. That's why the majority of real estate professionals consider insurance plans with additional coverage to ensure that all of their business and its property are protected.
2. Vehicle Insurance
The second most common type of insurance for those running a real estate firm is vehicle insurance. It protects your agents' vehicles against potential threats that occur during professional use. Given that a real estate agent's job is to research, search for, and showcase properties to clients—along with meeting with clients and other properties frequently—that means there's a lot of transit involved. Between meetings and showings, all of these require a means of transportation.
It's vital to know that there is a difference between personal and business use of a vehicle. If you have a vehicle that you're using for both purposes, you need to get extended coverage for your vehicle to include your business use of the vehicle, in addition to its personal use. If you don't have this coverage extension, then if you make a claim during business use, it's likely to be denied by your personal vehicle insurance policy.
Vehicle insurance is crucial. There is a higher potential for claims, which is a given considering that you might have multiple parties involved. For instance, if you're driving a client to a showing and are involved in an accident, then there's going to be multiple claims as your client was also involved.
3. Comprehensive and General Liability Insurance
What this type of insurance provides is broad coverage against claims of bodily injury and damage to the property of others (i.e., civil liability). If, during business operations, you cause damage or harm to other parties or their property, then your insurance will cover it.
Given that there are other parties (third parties) involved in these cases, there are likely to be legal costs involved. Therefore, it's important that this insurance also covers the legal defense costs of the insured (including lawyer fees), if the matter falls within the scope of the insurance policy.
There are certain situations and conditions which can fall under a comprehensive and general liability insurance policy. These include the following:
- Slip and Fall: If an accident takes place at the location of a business deal and not the private property of either the real estate agent or their client, then it falls under this policy.
- Burglary and Vandalism: If a situation occurs that involves either burglary or vandalism to a property that you, as an agent, show a client, then that property isn't owned by either party. Your insurance policy for comprehensive and general liability will cover such situations
- Fire and Smoke Damage: If a property that you show to a client is damaged by an accident involving fire, then it's covered by the above policy.
- Water Damage: If a property that you show a client is damaged by an incident involved water, then it remains under the coverage of the above policy.
4. Professional Liability Insurance
Given that real estate agents are human, it's only natural that they might make mistakes. This is where errors and omissions insurance (E&O) comes into play for real estate agents and their companies. When it comes to professional liability insurance for real estate, it's a different policy than the other above insurance policies because it's provided through what's known as the REIX (the Real Estate Insurance Exchange), which is governed by the RECA (the Real Estate Council of Alberta).
The above are the various types of insurance policies that a real estate agent needs in order to properly manage their risks. If you have questions about what policies you need or need insurance quotes, please contact Krywolt Insurance and we would be more than happy to provide you with answers to your questions.
