Commercial General Liability (CGL) insurance is intended to cover damages caused by negligence that has resulted in property damage or bodily injury. CGL policies may also cover defence costs*.
It’s important that brokerages have CGL insurance to protect REALTORS® from third-party claims. While some claims may be covered under a sellers’ insurance policy, Realtors may still be involved in a lawsuit if the property owners seek recovery for damages caused by the negligence of the Realtor. In other cases, the seller may not have insurance and the Realtor will be sued directly by the injured party.
Here are some potential examples of third-party claims:
- Injury to a client or third party during an open house or private showing (e.g., slip and fall).
- A Realtor forgets to lock up the home after a showing, allowing access to thieves or vandals.
- A Realtor lights a fire in the fireplace at an open house failing to ensure the chimney flue was open, resulting in severe smoke damage to the residence.
- A Realtor agrees to assume responsibility for snow removal for a customer who has moved out of town, then fails to do so and a pedestrian slips and falls.
- A signage contractor damages the property in the process of placing a sign for a Realtor.
- An open house sign blows into the street, striking a vehicle and causing an accident.
- An unlicensed assistant employed by the Realtor (not the brokerage) causes property damage or bodily injury.
- A vehicle owned by someone working on behalf of the Realtor or brokerage is involved in an accident and the Realtor and/or brokerage is third partied into the claim.
If a Realtor were sued in these examples and they did not have appropriate CGL coverage, they would have to pay their defence costs plus any awarded damages.
*Coverage subject to the specific policy wordings