Real estate is a high-investment and often high-risk industry. The nature of the business involves hundreds of thousands to multi-millions of dollars on the line and complex legal transactions, making investors, residents, and other associates more likely to pull the trigger on a costly lawsuit if they feel the company was in any way negligent. Having the right insurance in place is essential to keeping a real estate company from paying exorbitant lawyer fees and judgments which could drive the business into insolvency. While there are several policies that should be in place, one of the most important for the real estate industry is professional liability insurance.
Professional liability insurance—also sometimes referred to as professional indemnity or errors & omissions—covers real estate companies against lawsuits claiming negligence, misrepresentation, bad-faith negotiation, inaccurate or misleading advice, and other professional mistakes. Keep in mind that these claims do not need to be true for the insurance to cover the legal costs. In fact, professional liability insurance covering the real estate company against groundless lawsuits is a very common occurrence. Professional liability is often combined or overlapped with directors & officers insurance (a type of policy that exclusively protects executives from personal financial responsibility), and it serves to fill in coverage gaps in general liability policies.
Let's look at a few real-world examples that indicate the need for real estate companies to carry professional liability policies.
In one case, the owner of a recently purchased home sues the real estate company claiming his agent failed to notify him of existing water damage. In another scenario, a potential tenant sues a real estate company claiming they lost their promised apartment due to discrimination. In the case of real estate developers, the homeowners can sue years down the line if they believe the construction was mismanaged and caused preventable damages. There are even cases where investors may sue a developer if they believe they were misled about the costs of a project—a tricky situation because construction often runs over-budget with no inherent negligence on the part of the developer. These are just a few of the many examples in which professional liability insurance can protect a real estate company.
It is important for real estate companies to review their insurance policies carefully. Common exclusions may be applied in the case of criminal intent (such as a case of fraud or otherwise knowingly wrongful acts), injuries resulting in death, or property damage caused directly by an agent. It is important for real estate companies to work with an experienced insurance agent to ensure there are no coverage gaps between the various necessary policies.
“An ounce of prevention is worth a pound of cure.” Nowhere does this Benjamin Franklin truism prove itself more than cyber security. Every November 30th, businesses around the world are encouraged to celebrate Cyber Security Day by reviewing their cyber security plans and training employees to be more aware of potential online threats. Another key part to any cyber strategy is cyber liability insurance.
Here are some simple tips to help businesses make the most of National Cyber Security Day.
Do not connect to unsecured Wi-Fi networks
We find this tip is one of the hardest for businesses and employees to follow. Free Wi-Fi is just too convenient. Whether it's at the airport or a coffee shop, these networks are dangerously tempting for getting some quick work done. However, unsecured Wi-Fi networks—those that have no password or easily obtained passwords—are primed for hacking. Even something as simple as checking work e-mail from these networks can allow cyber criminals access to sensitive information. If you must have Wi-Fi on the go, we recommend using your smartphone as a hot spot with a backup battery charger.
Take advantage of automatic security updates
Keeping your computers, laptops, tablets, and smartphones secure is vital to any cyber security strategy. All devices must be protected in two ways. One is with updated operating software, and the second is with antivirus software. This means you need two types of automatic updates, e.g., Windows updates and McAfee antivirus updates. With workplace devices, the easiest way to stay secure is to allow automatic updates between off-work hours, usually overnight. Be sure that employees secure their personal devices if they do any work from them.
Consider switching antivirus software
For most consumers, the prepackaged antivirus that came with our computer is the one we tend to keep. However, businesses may need protection above the average consumer's needs. Lesser-known antivirus names like Avast, Bit Defender, TrendMicro, Avira, or Sophos may be a better fit for your business. You can also consider upgrading your standard software to a small business plan, such as Norton's.
Choosing Cyber Liability Insurance
Even the best-laid plans can be foiled by cyber criminals. Their full-time job is breaking into your system, and they are constantly changing their tactics and strategies. Even giants like Target, Home Depot, Equifax, Uber, and other corporations with sizable IT budgets can fall victim. What has saved these companies from going under is their cyber liability insurance. These policies can help keep afloat businesses big and small by paying for data recovery, consumer notification, lawyers' fees, government fines, and other associated costs. This Cyber Security Day is a great time to work with an experienced agent to find the right cyber liability policy.