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Connecting future homeowners with mortgage lenders brings in a set of unique challenges and risks. From an injury at your office to a transaction error - these are some of the things that can land you in a lot of trouble - both financial and legal.
And while there are many things you can do as a mortgage broker to protect your business from such unfortunate events - some accidents that may occur might be out of your immediate control.
That’s why getting your mortgage broker insurance is essential as no matter what accident might take place - your insurance company will provide you with all the financial cover you might need.
How Much Does Mortgage Broker Insurance Cost?
The total cost of your mortgage insurance will vary greatly on a number of factors including the size of your business, the level of cover you want to take out, and the state your company opiates out of.
Mortgage brokers in the United States pay an average of $30 per month or $360 per year on general liability insurance. This insurance will shield your business and its financial standing in case legal action is taken against your company on the basis of property damage or third-party bodily injuries.
A single mistake as a mortgage broker can cost you and your clients a lot of money. And to protect your business from the repercussions of such mistakes - taking out professional liability insurance, which is also known as mortgage broker E&O insurance is recommended. It costs the average U.S. mortgage broker around $55 per month or $660 per year.
If your mortgage brokerage firm has employees, you’ll need to take out worker’s compensation insurance. Such a policy costs around $50 per month or $600 per year and will provide your staff with financial coverage in case they fall sick or get injured at work.
Another popular insurance for mortgage brokers is business owner’s insurance. This policy will cost you around $50 every month or $600 per year and provides additional coverage that your general liability insurance doesn’t as well as commercial property insurance.
Mortgage Broker Insurance Requirements
There are multiple insurance policies available for your company. Elements such as the services you offer, business location and size, and the number of employees you have can affect the level of insurance coverage you need.
Discover the suggested insurance policies available for your business, and their detailed overviews, below.
Why Do Mortgage Brokers Need Insurance?
Handling other people’s assets or becoming an intermediary between lenders and borrowers is stressful and comes with a lot of risks. A single mistake can become the ground for a costly lawsuit.
And without insurance in place - if found to be at fault, your mortgage brokerage firm will have to cover all the costs associated with the claim or lawsuit including legal fees, compensation, and other.
For instance, if one of your employees forwards a transaction to the wrong account, and is unable to retrieve it in time, the broker can get sued by the client and ruled by the court to pay out the client all money that was lost.
In other cases, if a staff member of the mortgage broker firm is traveling to meet with a client and gets into a road accident using a company car, the insurance company will take care of all financial matters including the damages the company car has sustained, as well as any medical or hospital fees that your employee has accumulated.
Whatever the case might be - getting your mortgage brokerage firm insured for everything that could possibly go wrong - no matter how insignificant is a great way of protecting the financial standing of your business.