The Best Types of Insurance for Real Estate Companies

There are several types of real estate insurance that real estate companies in South Africa may want to consider to protect their business. First for Women offers business insurance policies tailored to specialist industries, like real estate. Discover what type of insurance is recommended for those in the property industry in South Africa.

5 Types of real estate insurance

The property market has great potential in South Africa, with estate agents dealing with sales and rentals in the business park, industrial and residential categories. Like any other business, it’s important to protect one’s assets, which is why insurance for estate agents is highly recommended. Some critical business insurance policies are needed in real estate, like:    

 1. Property insurance. This type of insurance covers damage to the company's physical assets, such as buildings and equipment, in case of events such as fire, theft or natural disasters.

 2. Liability insurance. This coverage will protect the company against claims of alleged negligence or any other liabilities that may arise. This is particularly important for real estate companies, as they may be held liable for accidents or injuries that occur on their property.

 3. Professional indemnity insurance. This is important for real estate companies that provide professional services such as property management or agency services. It serves as a type of errors and omissions insurance for real estate and will protect the company against claims of alleged professional negligence or errors and omissions.

 4. Business interruption insurance: This coverage will provide financial protection if the business is forced to shut down temporarily due to a covered event, such as a fire or natural disaster.

 5. Cyber liability insurance will protect the real estate company against losses resulting from cyber-attacks, such as data breaches or phishing. This is becoming increasingly important for the real estate industry as more and more transactions are conducted online.

 What isn’t covered by real estate insurance? 

 Real estate insurance in South Africa, like any other type of insurance, will have exclusions which are events, actions or circumstances that are specifically excluded from coverage under the policy.

 Some examples of typical exclusions in real estate insurance policies include:

• Damage caused by war or acts of terrorism[1]

• Damage caused by pollution or contamination

• Damage caused by pre-existing conditions or wear and tear

• Damage caused by criminal acts committed by an employee or tenant of the property

• Loss or damage caused by the failure of an electronic data processing equipment or media

• Loss or damage caused by failure of power supply or other utilities

• Loss or damage caused by the failure to maintain the property

 First for Women recommends that estate agents review the exclusions of the policy and ensure that they are acceptable to your business. If any exclusions are particularly important to your real estate business, you may consider adding endorsements to the policy to provide additional cover for those specific risks.

 Benefits of insurance for real estate companies and agents

 Examples of how real estate business insurance can be beneficial include some of the following scenarios: 

Example 1. Consider a real estate company that had a property damaged by a severe storm and flooding. The company had property insurance coverage, which covered the damage's cost, allowing the business to quickly get the property back on the market without any undue delays. 

 Example 2. What if a tenant of a property owned by a real estate company was injured in a slip-and-fall accident on the property? The real estate company would be liable for the tenant's injuries and medical costs. But if the real estate company had liability insurance, this type of insurance would cover the cost of the tenant's medical expenses and any legal fees associated with the incident, protecting the company from financial loss.

 Example 3. Imagine that a fire broke out in a building where a real estate company had its offices, causing significant damage and forcing the company to temporarily close it premises and operations. The business interruption insurance provided by the company's insurance policy would assist the business in continuing to operate by covering the loss of income during this time. Find out How business interruption insurance covers you from risk. 

 Example 4. Consider the implications if a real estate company's website is hacked, resulting in the loss of sensitive information and financial loss. The company's cyber liability insurance policy will cover the cost of restoring the website and any financial loss resulting from the attack, minimising the impact on business operations.

Get a real estate insurance quote from First for Women

 First for Women offers a wide range of business insurance for both large companies and entrepreneurs. There are also specialist insurance policies, like real estate insurance. Discover what type of insurance your real estate business needs by speaking to a member of our team. You can apply for a business insurance quote online today. 

Sources:

[1] Investopedia: What is a war exclusion clause in an insurance contract? 

 Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice. First for Women is a licensed non-life Insurer and FSP. T’s & C’s online.