Real Estate Appraiser Insurance Policy Information

Real Estate Appraiser Insurance. As a real estate appraiser, your job is to help buyers and sellers to figure out the value of property. Although real estate appraising might seem like a straight forward job, it comes with many risks. The number of risks involved in this type of business makes it a good idea to have insurance.
Appraisers provide independent valuation services for both real and personal property. These valuations may be used for tax or other financial statements, loss adjustment, insurable values, home or commercial building purchases, or as a result of legal action. Valuations may be based on replacement cost, market value, actual cash value (depreciated), or functional value.
Appraisers can specialize in specific types or categories of properties, such as real estate or collectibles, or they may offer a wide range of valuation services. Some offer their services to the general public, while others are trade- or industry-specific, such as insurance claims adjusting.
If you're in the business of real estate appraising, then getting the right insurance can protect your business from financial ruin. Here we will take a look at the different types of real estate appraiser insurance you can get to protect your business.
Real estate appraiser insurance protects your company from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked real estate appraiser insurance questions:
- What Is Real Estate Appraiser Insurance?
- How Much Does Real Estate Appraiser Insurance Cost?
- Why Do Real Estate Appraisers Need Insurance?
- What Type Of Insurance Do Real Estate Appraisers Need?
- What Are Real Estate Appraisers Risks & Exposures?
- What Does Real Estate Appraiser Insurance Cover & Pay For?
What Is Real Estate Appraiser Insurance?
Real estate appraiser insurance is a type of insurance that is specifically designed for individuals and businesses that provide real estate appraisal services. It helps protect against potential financial losses that may occur as a result of errors, omissions, or other types of professional negligence.
This type of insurance typically includes coverage for liability, errors and omissions, and professional indemnity, which can protect against claims related to wrongful conduct, damages, or other losses caused by the appraiser's professional activities. It can also cover the cost of legal defense, in case of a lawsuit.
How Much Does Real Estate Appraiser Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small real estate appraisal businesses ranges from $37 to $49 per month based on location, size, payroll, sales and experience.
Why Do Real Estate Appraisers Need Insurance?

Real estate appraisers need insurance for the same reasons that any other business owner needs insurance: to protect themselves, their employees, and their business from unexpected events that could cause financial harm.
Real estate appraisers are professionals who are hired to assess the value of a piece of real estate, which can include residential homes, commercial buildings, and land. This process involves conducting extensive research and analysis to determine the market value of the property.
As with any business, there is a risk of liability for real estate appraisers. For example, if an appraiser makes a mistake in their assessment that leads to a financial loss for their client, the client may try to seek compensation from the appraiser. In this situation, insurance can help protect the appraiser from the financial consequences of a liability claim.
Additionally, real estate appraisers may also need insurance to protect their own personal assets and to ensure that their business can continue to operate in the event of unexpected events such as natural disasters or legal disputes.
Overall, insurance is an important tool for real estate appraisers to protect themselves, their employees, and their business from potential financial risks.
What Type Of Insurance Do Real Estate Appraisers Need?
To adequately protect your business as a real estate appraiser you'll need a variety of real estate appraiser insurance policies in your insurance portfolio. Each insurance policy you get for your appraising business will cover a different type of risk.
Here are some of the different insurance plans you could get for your business:
Commercial General Liability Insurance - If your company gets a lawsuit and you're required to go to court then this the insurance you need. Having this insurance helps with the costs associated with legal defense and other judgments as a result of the trial. If an employee causes damage to a third party or their property, then this insurance will help to cover your business.
Professional Liability Insurance - Also known as errors and omissions insurance, professional liability is the type of insurance that provides you with protection against lawsuits due to negligence. If you fail to perform your professional duties successfully you can be held liable. Appraisers get many frivolous lawsuits for issues that originate after the home is purchased. For this reason having this real estate appraiser insurance is best. Being a real estate appraiser makes this the most important insurance you can get for your business.
Commercial Auto Insurance - Having this insurance protects the vehicles you use for your business. Many personal car insurance policies do not cover business use. This insurance covers any damaged caused by your business vehicles when driving to inspections and other meetings.
Non-owned Auto Liability Insurance - If an employee uses their vehicle to do work for the business, they will need protection while on the road. Non-owned auto liability insurance is how you will provide them with this protection. Having this insurance is important to keep your employees protected when they use their vehicles for business errands. So if they hurt someone and your business is sued you will have protection.
Workers' Compensation - One of the most important insurance policies to have for your business. Workers comp is required in many states for any non partner or owner employees. If an employee is injured while on the job and required to see a doctor, then this insurance helps with the costs associated with that injury. This insurance also offers benefits to the family if the injury results in a fatality.
What Are Real Estate Appraisers Risks & Exposures

Premises liability exposure is often very limited as most of the client contact is done over the phone, electronically, or by mail. Appraisers may spend a lot of time off-site at clients' premises, loss sites, or at premises undergoing valuation. There must be training and procedures for appropriate behavior. Complaints about appraisers should be dealt with quickly.
Professional liability exposures arise from the accuracy of the appraiser's analysis of the valuation information. If done in conjunction with a loss, claims settlements can involve millions of dollars. Independent insurance appraisers may have legal responsibilities to both the insurer and the insurer's policyholder and are sometimes party to sensitive negotiations. Real estate appraisers' calculations may have a significant impact on the salability and purchase price of a property. Hazards increase if the firm fails to conduct thorough background checks to verify employees' education and employment history.
Workers compensation exposure is based on the type of items being appraised. Since office work is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations. Travel may be extensive. Exposures increase with offsite work as the appraiser may work in damaged buildings or under other compromised conditions. Protective gear must be provided in certain circumstances. Appraisers may be injured in automobile accidents.
Property exposure is generally limited to that of an office, although there may be some incidental storage or an area for meetings. There may be considerable storage of property valuation documentation, diagrams, photos and similar records, although these are now often digital instead of paper format. Ignition sources include wiring, heating and air conditioning systems, wear, and overheating of equipment. Computers and other electronic equipment may be targets for theft.
Crime exposure is from employee dishonesty and various types of fraud to both clients and third parties such as banks, insurers, or real estate firms with an interest in the valuation of the property. The exposure can be quite serious as appraisers have access to individual customer's personal and proprietary information. Hazards increase without proper background checks and monitoring procedures. All job duties, such as ordering, billing, and disbursement, should be separate and reconciled on a regular basis. Audits should be conducted at least annually.
Inland marine exposure is from accounts receivable if the appraiser offers credit, computers, special floaters, and valuable papers and records for clients' and valuation information. Appraisers do field work which requires a variety of specialty equipment to do their valuations. The customers' papers on file may be originals that are difficult to re-create. A morale hazard may be indicated if the appraiser does not keep valuable papers and disks in fireproof file cabinets to protect them from smoke, water, and fire. Power failure and power surges are potentially severe hazards. Duplicates should be kept off-site to allow for re-creation in the event of a loss.
Commercial auto exposures will vary. The primary risk is from hired and non-owned vehicles as appraisers may use rental cars when sites to be valued are not local. If company vehicles are supplied for use, there should be written procedures in place regarding personal use by employees and their family members. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and records kept in a central location.
What Does Real Estate Appraiser Insurance Cover & Pay For?

Real estate appraisers may be sued for a variety of reasons, including:
- Errors or omissions in the appraisal report: Appraisers may be sued if they make a mistake or omission in their report that results in financial harm to their client.
- Overvaluation or undervaluation of a property: If an appraiser overvalues or undervalues a property, it can result in the client paying too much or too little for the property, leading to a lawsuit.
- Failure to disclose a conflict of interest: If an appraiser fails to disclose a conflict of interest, such as a financial interest in the property, it can lead to a lawsuit.
- Negligence or professional malpractice: Appraisers may be sued for negligence or professional malpractice if they fail to adhere to the standard of care expected of them, resulting in financial harm to their client.
Real estate appraisers can protect themselves from these types of lawsuits by obtaining professional liability insurance, also known as errors and omissions (E&O) insurance. This type of insurance provides coverage for damages and legal defense costs in the event of a lawsuit resulting from professional negligence or errors and omissions.
For example, if an appraiser is sued for errors or omissions in their appraisal report, their E&O insurance can help pay for legal defense costs, as well as any damages awarded to the plaintiff if the appraiser is found liable. Similarly, if an appraiser is sued for overvaluation or undervaluation of a property, their E&O insurance can help cover the cost of legal defense and any damages awarded.
In addition to obtaining professional liability insurance, appraisers can also protect themselves by ensuring they are following the industry's best practices and standards. They should thoroughly research and analyze the property being appraised and provide a comprehensive and accurate report. They should also disclose any potential conflicts of interest and be transparent with their clients.
Furthermore, appraisers should maintain a high level of professionalism and communication with their clients throughout the appraisal process. By doing so, they can minimize the risk of misunderstandings and disputes that could lead to legal action.
Overall, while real estate appraisers may face the risk of lawsuits, they can protect themselves by obtaining professional liability insurance, following industry best practices and standards, and maintaining clear communication with their clients.
Commercial Insurance And Business Industry Classification
- SIC CODE: 6411 Insurance Agents, Brokers, and Service, 6531 Real Estate Agents and Managers
- NAICS CODE: 524298 All Other Insurance Related Activities, 531320 Offices of Real Estate Appraisers
- Suggested Workers Compensation Code(s): 8720 Inspection of Risks for Insurance or Valuation Purposes NOC, 8721 Real Estate Agency - Outside Employees & Collectors
Description for 6531: Real Estate Agents and Managers
Division H: Finance, Insurance, And Real Estate | Major Group 65: Real Estate | Industry Group 653: Real Estate Agents And Managers
6531 Real Estate Agents and Managers: Establishments primarily engaged in renting, buying, selling, managing, and appraising real estate for others.
- Agents, real estate
- Appraisers, real estate
- Brokers of manufactured homes, on site
- Brokers, real estate
- Buying agents, real estate
- Cemetery management service
- Condominium managers
- Cooperative apartment manager
- Escrow agents, real estate
- Fiduciaries, real estate
- Housing authorities, operating
- Listing service, real estate
- Managers, real estate
- Multiple listing services, real estate
- Real estate auctions
- Rental agents for real estate
- Selling agents for real estate
- Time-sharing real estate: sales, leasing, and rentals
Real Estate Appraiser Insurance - The Bottom Line
There's no effective way to predict what will happen to your business in the future. This is why it's best to stay prepared and one of the best ways to be ready is to have insurance. To get started on finding the best insurance coverages for your real estate appraiser business you can speak with an experienced insurance agent.
Doing this will put you in the best position to find the insurance that's right for you.
Additional Resources For Real Estate Insurance
Learn about small business real estate insurance coverages including liability and commercial property policies for realtors, mortgage companies and more.
- Corporate Office
- Home Inspectione
- Property Manager
- Real Estate Agents
- Real Estate Appraiser
- Specialty Real Estate

The real estate industry involves a lot of investment, both in terms of finances and time. Therefore, it is important for real estate professionals to protect themselves and their assets with business insurance.
One major reason why the real estate industry needs commercial insurance is to protect against lawsuits. As a real estate professional, you may be sued for various reasons such as property damage, injury on the property, or even discrimination. Insurance can provide financial protection against these types of legal issues and help cover the costs of defending against a lawsuit.
Another reason why commercial insurance is important in the real estate industry is to protect against natural disasters. Homes and other properties can be damaged by natural disasters such as hurricanes, tornadoes, and earthquakes, which can lead to costly repairs. Insurance can provide financial assistance to cover these repair costs and help real estate professionals get back on their feet after a disaster.
Finally, insurance is important for the real estate industry because it can help protect against financial loss. For example, if a real estate investment goes sour or a property is not rented out as expected, insurance can provide financial assistance to help cover the losses.
Overall, the real estate industry needs business insurance to protect against legal issues, natural disasters, and financial loss. Without insurance, real estate professionals may face significant financial and legal risks that could impact their business and livelihood.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income with Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage abd Stop Gap Liability.