5 Risks and Exposures Real Estate Offices Need to Watch Out For

By Axis Marketing

office area hallway

Real estate agents and brokers offer the service of listing, advertising, promoting or arranging for the sale of real property or land for the seller or locating properties for a buyer. However, there are a variety of risks and exposures that their offices can fall victim to. 

Here are 5 risks and exposures real estate offices need to be watchful for:


1. Property exposure:

Property exposure is primarily an office exposure. There may be considerable storage of customers’ records, which significantly adds to a fire load. Storage should be in fireproof file cabinets, and fire suppression systems must not damage the papers.


2. Inland marine exposures:

These are Accounts Receivable, Computers and Valuable Papers. Where are the valuable papers stored? How are they documented? Where are the duplicates? Is there a computer record?


3. Crime exposure:

Crime exposures come from Employee Dishonesty, including customers’ property. There must be methods and procedures in place to prevent employees from gaining access to customers’ property and taking it. Realtors have access to customers’ financial information, which can be used by employees. Background screening is vital, along with monitoring procedures and securing of all records to keep access limited.


4. Occupiers’ liability:

This is limited. Customers must be kept in customer waiting areas and designated conference areas. All areas must be well maintained with floor covering in good condition.

An important consideration is the status of employees vs. subcontractors. The relationships and contracts vary by agency. Contracts should be clear as to services provided by the agency to the subcontractors and the expectations the agency has of the subcontractor.

What about clients’ houses -- are there exposures? Are there open houses and who is responsible for damage? How are the keys kept? Are there lockboxes or other devices that permit easy entry? How is the entry information passed on to other agents -- is there a record kept of agents who ask to visit a home and who have gained entry?


5. Professional liability exposure:

This is extensive. What services does the applicant provide? What are their credentials? How many employees are professional? Are clericals allowed to carry out tasks that only the professionals should handle? Is there a regular monitoring of files to check for errors and process of employee evaluation? Are these documented? Are there thorough background checks to verify credentials and education?




Find Out More:

Assessing your exposures and taking the appropriate precautions can go a long way toward protecting your business.

Download our “Risk Summary - Real Estate Offices” guide for an in-depth list of more ways to minimize gaps in your risk management:


Download Here


Tags: Construction, Contractors & Real Estate

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