Why Every Real Estate Company Requires General Liability Insurance

Why Every Real Estate Company Requires General Liability Insurance

The real estate industry is experiencing substantial growth, reaching into the hundreds of billions of dollars and maintaining a steady annual growth rate of over 3.5%. While this expansion brings in more clients—buyers, sellers, tenants, and landlords—it also escalates the associated risks. Every interaction, be it showcasing a property or conducting an inspection, carries inherent risks. Accidents can happen, and this is where general liability insurance plays a crucial role.

Why Do Real Estate Companies Need General Liability Insurance?

Maya Angelou’s wisdom, advocating for hope, preparation, and acceptance of the unexpected, resonates well in business, especially concerning insurance. General liability insurance becomes a crucial component in this approach, offering protection against various claims that could potentially jeopardize your business. Claims can emerge from any quarter and at any time, originating from any client. General liability coverage safeguards your business from a spectrum of potential claims that could have severe financial implications.

Without insurance, a single claim has the potential to incur costs ranging from a few hundred dollars to well over $100,000, encompassing legal fees, compensation, and lost business.

Coverage for Injury

General liability insurance provides coverage for claims related to personal injury. Whether it’s clients, vendors, or other individuals associated with your business, this coverage safeguards against potential personal injury claims. Common scenarios include a client injuring themselves during a property viewing or sustaining harm while visiting your offices. Whether it’s a fall down stairs or an accident involving hot coffee during a meeting, general liability insurance ensures coverage for costs arising from such claims, including compensation, legal fees, medical expenses, and loss of earnings. Given that personal injury settlements can average around $62,600, having this coverage is paramount for the financial well-being of real estate companies.

Coverage for Property Damage

Real estate businesses conduct numerous property viewings each week, creating scenarios where property damage claims may arise. Whether you accidentally damage a valuable item during a property tour or unintentionally cause harm to the property itself, general liability insurance covers the associated costs. This coverage not only addresses financial concerns but also helps maintain a positive relationship with property owners, essential for client retention.

Additional Coverage

Beyond personal injury and property damage, general liability policies extend coverage to claims of copyright infringement and defamation. Real estate companies engage in extensive marketing efforts, and during campaigns, accusations of stealing ideas or infringing on copyrights can arise, leading to legal battles, compensation, and substantial legal fees. General liability insurance serves as protection against such claims.

Moreover, it covers defamation claims, addressing situations where individuals accuse your business of damaging their reputation. These claims, often complex to resolve, have an average settlement of around $15,000.

Exclusions from Coverage

While general liability insurance is comprehensive, there are certain exclusions. It does not cover injury to employees (covered by workers’ compensation), portable office equipment (covered by business personal property insurance), auto-related incidents (covered by commercial auto insurance), professional mistakes and negligence (covered by errors & omissions insurance), and theft, loss, or breakdown of equipment (covered by commercial property insurance).


In essence, general liability insurance is indispensable for real estate companies. With claims capable of originating from any client and the potential for accidental property damage, the associated costs can be substantial. Considering the financial risk, acquiring general liability insurance is a prudent and necessary investment in safeguarding your real estate business.

Leave a Reply

Your email address will not be published. Required fields are marked *