Real estate is an industry that requires significant investments from the businesses involved. You should be wary as an investor.
Think about all of the possible risks. The real estate appraiser you hired might commit a calculation error. Workplace accidents can also happen. The real estate developer you’re working with through a joint venture might sue for breach of contract. Finally, a real estate agent of your company might commit fraud or misrepresentation against clients.
Real estate investor insurance is for trusts, commercial real estate investors, and residential real estate investors. Purchase insurance so it's easy to gain the trust of real estate developers and other prospects. Read how it works, how much to pay for premiums, and where to get comprehensive coverage.
Transactions in real estate are very complex. Clients can sue if significant issues arise. Because of this, most real estate investors get errors and omissions insurance.
You need a $1 million-$5 million errors and omissions insurance. Here are some situations where you’ll find this useful:
A client decided to sue you after discovering that the contract is highly favorable on your part
An owner accused you of lowering the valuation of his residential property more than the real value to gain better profits
A renter accuses you of inflating the cost of a rental property without notice and in violation of the rental contract
You decided to back out of the deal without telling the seller of the property you promised to buy
You forgot to disclose to the buyer or renter that the building you’re selling has high levels of asbestos
A tenant failed to pay his monthly dues. You purposely locked the building or cut off utility services to kick them out
Errors and omissions insurance covers expenses if you’re liable for or accused of committing negligence, violation of good faith, violation of fair dealing, misrepresentation, and breach of contract. Particularly, you can use this insurance to pay:
Settlements
Defense costs
Court judgments
You also need general liability insurance as a real estate investor. Consider getting $2 million-$5 million coverage from this policy. Here are some situations where you’ll find general liability insurance useful:
You hired a construction company to renovate a building. An accident happened during the renovation and a worker got injured. The construction company demands you pay for the worker’s medical treatment
A client sustained a broken hip after a slip and fall accident in your office
An independent contractor caused an accident while working, resulting in injuries to third parties. The aggrieved parties sued you instead because the independent contractor doesn’t have insurance
The wiring of your rental property is defective and not fixed. The building burned and damaged the valuables of the renters
General liability insurance grants a shield when you’re liable for bodily injuries or property damage. It can also provide coverage to the bodily injuries or property damage caused by independent contractors working on your behalf. Use this insurance to pay for:
Medical treatment of the claimant
Reimbursement of the claimant’s damaged property
Defense costs
Settlements
Similar to the general liability insurance for real estate agents, the general liability insurance for real estate investors is a broad-form coverage that will also cover:
Claims for advertising injury, slander, and libel
Breach of confidentiality
Auto accidents caused by a hired or borrowed commercial vehicle
You also need pollution liability insurance as a real estate investor. This will grant coverage if third parties hold you liable for:
High asbestos levels of a real property
Mold outbreak
Debris and dust as caused by building destruction or collapse
Chemical runoff that occur while an independent contractor is renovating or constructing a building, house, or other real property you own
Pollution caused by a vehicle carrying hazardous wastes and materials from your real property
Consider getting $10 million pollution liability insurance to enjoy comprehensive protection against the perils above. You can use the insurance money from this policy to pay these expenses:
On-site and off-site remediation costs
Debris removal
Containment of chemical runoff and environmental restitution
Compensation for bodily injuries or property damage to third parties
Mold or asbestos containment and removal
Emergency mitigation expenses
Lost revenues
Directors and officers liability insurance protects the owner, directors, and officers of a real estate investment company.
This is essential if your real estate investment company is operating as an LLC, a trust, or a corporation. Here are some situations where D&O insurance is useful:
A hardworking employee files a claim for discrimination after your real estate investment company’s directors and officers nullified his promotion without any valid reason
A shareholder decided to sue after the directors and officers of your company sold a property to a sister company at an unreasonably cheap price
Your company faces a claim for breach of confidentiality after an officer disclosed information for a project that should be under wraps
Shareholders and members of your company file a claim after embezzlement happened, which the directors and officers couldn’t trace
Your real estate investment company bought the property of a director at an unreasonably expensive price. Because of this, a shareholder decided to file a claim and accused the directors and officers of conspiring against the best interest of the company
You need to get at least $5 million D&O insurance for real estate investors. Directors and officers liability insurance applies if vendors, employees, members, shareholders, and other entities file a claim because you, the directors, and other officers committed:
Social engineering
Breach of fiduciary duty
Embezzlement
Violation of fair dealing
Breach of confidentiality
Misrepresentation
Negligence
Mismanagement and workplace discrimination
So what costs does directors and officers insurance account for? Your company can use this insurance to:
Reimburse the losses of the director and officers after compensating or settling for the losses of the claimant
Reimburse your company if it grants indemnification on behalf of directors and officers
Cover the defense costs of the officer or director sued by the claimant
Cover your company’s legal defense expenses if your real estate investment business is also pulled into the lawsuit for the wrongful act of directors and officers
Get all the best quotes from leading providers in a click of a button!
While the tenant’s property insurance covers your building, it’s good to get an additional layer of protection.
Rental property insurance covers the residential and commercial property that are currently occupied by tenants. This will reimburse your losses if the following perils cause the damage or destruction of your rental property:
Fire
Lightning
Falling objects
Smoke
Explosion
Wind and hail
Aircraft
Vehicle
Broken plumbing, heating, sprinkler, or appliances
Civil commotion
Riot
Real estate investor’s rental property insurance automatically offers a premises liability coverage with a $1 million-$2 million per occurrence and aggregate limit. Premises liability coverage covers the bodily injuries or property damage of tenants and other third parties who experience an accident while on your property.
You also need coverage for properties under renovation. For this purpose, get renovation property insurance.
Renovation property insurance for real estate investors reimburses your expenditures if the property and building materials sustains damaged or gets destroyed during renovation due to:
Explosions
Equipment breakdown
Impact
Theft
Winds
Human error
Fire
Lightning
A general liability policy is automatically included as part of renovation property insurance. Because of this, you enjoy protection if a passerby, independent contractor, inspectors, and other third parties sustained injuries or property damage while you’re property is being renovated
Consider getting builders' risk insurance if you want comprehensive coverage for new buildings under construction and old buildings under renovation.
Builders risk insurance applies if a building you asked a construction company to build from scratch or renovate gets damaged or destroyed due to:
Fire
On-site theft
Equipment breakdown
Vandalism
Floods, earthquakes, mudslides, and other natural catastrophes
The coverage of builders' risk insurance also applies to materials and temporary structures such as beams, cement, scaffolding, etc. Read the fine print of your builder's risk policy to know which items are covered.
Builders' risk insurance has exclusions. Remember that it doesn’t grant coverage against these perils:
War, nuclear hazard, or demolition mandated by the government
Design errors
Theft and fraud committed by independent contractors or property custodians
Normal wear and tear, corrosion, rot, mold, asbestos, etc.
Pollution liability
Also called unoccupied commercial property insurance, vacant property insurance is coverage for buildings you own that have been vacant for an extended period of time.
You purchase this as a named-perils or all-risk policy that reimburses losses when the vacant building gets damaged or destroyed due to:
Fire
Theft
Vandalism
Riot
Civil commotion
Malicious mischief
Lightning
Impact
Vehicle
Aircraft
Snow
Hail
Rain
Vacant property insurance also covers the computers, furniture, CCTV camera, signage, fire alarm, and other installations outside and inside your building that people aren’t currently leasing or renting.
It’s possible to add a business interruption coverage to vacant property insurance. By doing this, you get reimbursement for lost income while no tenant is paying for their occupancy in your building.
Though the policy covers almost all kinds of buildings you own, coverage doesn’t usually apply on these kinds of real property:
Unfinished buildings
Abandoned buildings
Unoccupied buildings that were used for chemical storage and manufacturing, goods storage and manufacturing, or warehousing
There are some exclusions to real estate investor’s vacant property insurance. It doesn’t grant protection against:
Molds
Rats, cockroaches, mice, termites, and other pests
Floods
Strangers, inspectors, or future tenants can get injured or have their property damaged while exploring your unoccupied building. Because of this, vacant property insurance automatically comes with a $1 million-$2 million general liability insurance.
Consider getting workers' compensation insurance. You’ll need this as soon as you employ one or more real estate agents, accountants, clerks, appraisers, and other professionals.
An employee can experience an occupational injury anytime. Workers' compensation insurance helps you provide benefits without using company funds. Common costs covered by this policy are:
Private EMT service fees, surgeries, therapies, and other expenses for medical treatment
Inpatient hospital bills
Medication
Rehabilitation and retraining
Lost wages
Funeral expenses, allowance to dependents, and other death benefits
You don’t need to cover independent contractors with workers' compensation insurance. Nonetheless, if they require coverage, you can name them as additional insureds.
Employer’s liability insurance will be offered as part of workers' compensation insurance for real estate investors. Use this to cover settlements, defense costs, and court judgments if an employee sues your company after sustaining a work-related injury or disease.
Purchase employment practices liability insurance because employees can also file a claim for employment-related issues. By having this insurance, you can cover defense costs when an employee holds your real estate investment business liable for:
Sexual harassment
Discrimination
Wrongful termination
Unreasonable rejection of promotion
Retaliation
Exploitation
Other acts that violate employee rights
Get commercial auto insurance to cover unfortunate events that can happen while you’re using a vehicle to meet clients and visit properties. Commercial auto insurance does the following on behalf of your real estate investment business:
Cover the medical treatment and property damage of people who get involved in an auto accident you caused
Pay for parts repair or replacement if your car got damaged in a collision or because of fire, theft, lightning, vandalism, weather, and other covered perils
Reimburse public transportation fees and vehicle rental expenses
Cover the medical treatment of the driver and passengers
A business owner’s policy is a combination of business property insurance and general liability insurance.
Aside from protecting your business against claims for bodily injuries or property damage, a business owner’s policy also reimburses losses if your office and its contents get damaged due to:
Fire
Theft
Vandalism
Civil commotion
Riot
Sprinkler leakage
Sinkhole collapse
Volcanic action
Vehicle
Aircraft
Impact
Winds
Storm
Hail
Snow
| Cost per Month | Cost per Year | |
|---|---|---|
| General liability insurance | $46 | $552 |
| Professional liability insurance | $65 | $780 |
| Workers compensation insurance | $85 | $1,020 |
| Business owner’s policy | $54 | $648 |
Expect to pay $46 per month or $552 per year for a general liability insurance policy with a $1 million per occurrence limit and a $2 million aggregate limit.
Real estate investor insurance cost is dependent on a wide variety of factors, such as claims history, business history, revenues, number of employees, location, and more. Here’s a table showing the rates of the recommended carriers:
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| NEXT | $25 | $300 | Best overall; Fastest general liability insurance for real estate investors |
| CoverWallet | $28 | $336 | Real estate investor insurance quotes comparison online |
| Tivly | $33 | $396 | Comparing real estate investor insurance quotes over the phone |
| Hiscox | $38 | $456 | Professional liability and general liability insurance with customizable limits for real estate investors |
There are many different companies that operate in the real estate insurance industry, and picking out the right one can ensure that you get the best rates available. Read the reviews below to know the best companies’ pros, cons, and pricing for a $1 million general liability coverage.
Best overall
Get an online proof of insurance and send as a text message, email, or social media post
Fastest general liability insurance for real estate investors
Great customer service and reputation
Issues an online proof of insurance instantly
Outstanding value for money
Bundle two or more insurance policies and get a 10% discount
Couldn’t find any
NEXT’s general liability insurance for real estate investors has a $300,000 minimum per occurrence limit. You can upgrade your real estate investor insurance plan to increase general liability policy’s coverage to $1 million. Also, upgrading adds a $1 million professional liability coverage.
Best for: Best overall; Fastest general liability insurance for real estate investors
Average cost: $25 per month
Our rating: 10/10
Compare real estate investor insurance quotes online
Name additional insureds on your policies for free
No hidden charges
Zero deductibles on general liability insurance
Not an insurance company but an insurance broker
CoverWallet provides coverage for all kinds of activities involved in real estate. You can get general liability insurance, professional liability insurance, workers compensation insurance, and a business owner’s policy from this company.
CoverWallet’s general liability insurance has a $1 million per occurrence limit with a $2 million aggregate. You can add terrorism coverage and non-owned/hired auto liability coverage to the policy’s terms at an additional cost.
On the other hand, your professional liability insurance from this company will have a $1 million per occurrence and aggregate limit.
Use CoverWallet’s online quotes comparison tool to look at the rates of other insurance companies before getting covered.
Best for: Real estate investor insurance quotes comparison online
Average cost: $28 per month
Our rating: 10/10
Responsive customer service
Compare real estate investor insurance quotes over the phone
Can refer you to partners if it can’t provide coverage
A partner of reputable insurance companies
You need to call to get a quote
Tivly (formerly CommercialInsurance.NET) works with many types of customers. And so, it might provide coverage for real estate investors like you. Call Tivly now to talk with a representative and compare real estate investor insurance quotes over the phone.
Best for: Comparing real estate investor insurance quotes over the phone
Average cost: $33 per month
Our rating: 10/10
Customizable limits
14-day money-back guarantee
Worldwide coverage
Fast to process claims
You can’t get commercial property insurance as a stand-alone policy
Hiscox provides general liability insurance, professional liability insurance, and business owner’s policy to real estate investors.
Your professional liability insurance from this company has a $250,000 minimum per occurrence and aggregate limit.
On the other hand, general liability insurance has a $300,000 minimum per occurrence and aggregate limit.
You can customize your general liability and professional liability insurance to enjoy higher coverage.
Best for: Professional liability and general liability insurance with customizable limits for real estate investors
Average cost: $38 per month
Our rating: 10/10
Get all the best quotes from leading providers in a click of a button!
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
Not all those who wander are lost.
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