The Front Line
Thursday, November 15, 2012
Orlando REALTOR® | November/December 2012
Insurance is the REALTOR’S® first line of defense
By Dean Vanderpool
There is no standard formula used to calculate a REALTOR’S® risk when providing services in the real estate industry. Each REALTOR’S® potential for risk is defined by the particular real estate services performed by the REALTOR® and the REALTOR’S agency. It’s axiomatic: A REALTOR® working as a residential sales specialist is going to incur a different level of risk than the REALTOR® working in commercial real estate planning and developing specialized industrial properties.
Any effective risk management program begins with a qualitative review of the REALTOR’S® complete line of business. Once a qualitative assessment is completed (often by the insurance company), risk can be properly assessed and quantified in order to determine where maximum exposure to catastrophic loss exists, and which insurance products are therefore most appropriate.
There are several types of insurance products available for use by the REALTOR® community, including:
- general liability;
- errors & omissions;
- property; automobile;
- worker’s compensation;
- cyber liability;
- crime; and
- employment practices liability.
REALTORS® can purchase and combine several individual products to effectively weave a web of protection against catastrophic loss.
Each insurance product differs in what it covers, depending on the wording of the actual policy and the added riders or endorsements referenced in and attached to the insurance policy. Read your policy thoroughly to ensure that the coverage afforded provides you with the protection level you intended. If it does not, talk to your agent before finalizing the coverage.
Be truthful when completing any insurance application. If you intentionally answer a question wrong, the policy is considered null and void and you’re left with an insurance policy that is worthless.
Never lie on an application! Under Florida law, any person who knowingly supplies false information on an insurance application is guilty of a third-degree felony.
Dean Vanderpool, Devan Realty and Development Corporation, is the chairman of the ORRA Risk Management Subcommittee. He can be reached at email@example.com.
ORRA frequently schedules classes, workshops, and online offerings related to risk management. Check the ORRA Calendar often, as new classes are continually being added to the 2013 education lineup.