Auctioneers must be on their toes at all times, when they are doing their job. While veteran auctioneers are accustomed to handling stressful situations, newbies are just learning. Contrary to belief, it takes a long time to become good at auctioneering. Along the way, mistake will be made. And, some of these mistakes could cost companies, organizations and individuals who are auctioning off their goods a financial loss.
Regardless, if you are auctioning off livestock, vehicles or furniture, mistakes are always a possibility. This is why it is crucial to obtain professional liability insurance, which protects against financial loss associated with third-party claims and civil lawsuits.
As an auctioneer, you are licensed by the state you are operating in. So, you are required to follow the laws of your profession. There are several scenarios that could lead to a complaint or civil lawsuit. These scenarios include misleading information provided on listings, wrong starting prices and mistaking nonverbal actions for bids. All of these mistakes will either cost the seller or the buyer. And, in some cases, both parties can lose money.
Facing a lawsuit or claim as an auctioneer can potentially ruin your business. Errors and Omissions can help to reduce the impact of these mistakes and protect your business from bankruptcy and closure.
Additional Coverage Recommendations
All auctioneers operating in Canada should acquire additional insurance coverage, mentioned below, if they qualify under the insurance company underwriting guidelines. As mentioned above, mistakes are always a possibility for auctioneers. You can never have enough coverage, but too little coverage will cost you dearly, if you make a mistake that leads to a financial loss for your client or a bidder.
CGL protects against lawsuits associated with false advertising claims. Even though you try to be as accurate and informative as possible about your services, it is possible to mislead consumers without actually meaning to. If one of your clients claims you falsely represented or advertised your services and they lose money, you will be forced into a civil lawsuit that could last for several months to years. If the judge rules in favor of the plaintive, you will pay dearly. This is where commercial general liability insurance comes into play. It will cover part or all of your litigation costs and all or part of the monetary judgment.
It is recommended to carry at least $500,000 in coverage. However, if you believe your exposures are extremely high, it would be in your best interest to increase your coverage amount accordingly.
Commercial General Liability Insurance Recommended Limits – $1,000,000 per claim / $2,000,000 aggregate
Commercial Property Insurance
If a natural disaster destroys your place of business, you will be forced to close your doors for an unspecified period of time. If your business is not insured, you may not be able to afford the repair costs. This is why it is recommended to carry commercial property insurance, as it will cover the repair or renovation costs associated with the damaged caused by the natural disaster. In Canada, this insurance is a requirement for all business owners, including auction companies.
It is recommended to carry between $500,000 and $1 million in coverage. Your coverage amount will depend on your level of exposures and risks.
Commercial Property Insurance Recommended Limits – $500,000 per claim / $2,000,000 aggregate
All professionals are at risk of becoming a victim of cyber crime. This especially includes auctioneers who conduct business online. If you own and operate an online auction website, you are at a higher risk. Cyber crimes include anything from stealing or destroying personal/business data, network intrusions and loss of access to irreplaceable items, such as videos, images and written content. All these crimes could put you and your company at risk of a third-party claim or civil lawsuit. Cyber insurance will protect you and your company against damages caused by cyber crimes.
It is recommended to carry at least $100,000 in coverage. If you conduct all of your business online, you may want to increase your coverage amount to fully protect your company against cyber crimes.
Cyber Insurance Recommended Limits – $100,000 per claim / $1,000,000 aggregate
Many auctioneers try to keep their expenses to a minimum. And, doing so will mean opting out on additional insurance coverage. This is a huge mistake, because many types of insurances are extremely affordable and effective.
- Professional Liability Insurance – $50 a month
- Commercial Liability Insurance – $30 to $40 per month
- Cyber Insurance – $15 per month
Be sure to get in touch with us to get a free quote today. You can do so using the form on our website. Or, you can contact us via phone or email. Our turn around times with getting you some quotes are quite reasonable.
Also ask you broker about how to apply for workers comp coverage. You employees must be covered by it!
FAQ before purchasing auctioneer professional liability insurance
- How much professional liability insurance do I need as an auctioneer?
- How do I get an auctioneer insurance policy?
- What does auctioneer professional liability insurance cover?
- What is the difference between claims made & occurrence form of coverage?
- When will I need to be insured as an auctioneer?
- What other professions need this type of insurance?
Other useful posts you should also read
- Canadian insurance companies that provide professional liability insurance for auctioneers
- How does the claims process work if I get sued because of my auctioneering services?
- What is the cost of auctioneer professional liability insurance?
- How do I apply for an auctioneer professional liability insurance policy?
- How do I qualify for coverage as an auctioneer?
- What is the purpose of getting insured as an auctioneer?
- How long will it take to get an insurance quote for my auctioneering business?