Adding your broker as an additional insured on your car insurance

There are basically two ways to work for someone. You could be an independent contractor or an employee. When you are acting as an employee, the employer is generally liable for whatever you do while acting in the scope and course of employment. This is known as the doctrine of respondent superior or, "let the master answer".

In real estate, while typically treated as an independent contractor for tax and compensation purposes, salespeople are employees of the broker in the eyes of the law and Department of Real Estate.

Therefore, if you are showing property and are involved in an accident, you (as well as the broker under respondent superior) would be liable if at fault. Again, this is because at the time of the accident you were acting in the scope and course of employment as a real estate agent employed by that broker.

This is why the broker is listed on your car insurance policy as an "additional insured" also covered against claims made against the insurance up to the purchased limits.

I wanted to blog about this because many of you are going to go on to great careers in the industry and I don't want you to think that a broker is being unreasonable by asking to be added as an additional insured on your car insurance. It is legitimate - and now you have the back story! In fact, the third page of the most recent California Association of Realtors Independent Contractor agreement says this explicitly. It even dictates the amount of coverage you must have. Many brokers require $100,000/$300,000.

Any questions, give us a call or email!