Real estate professionals are rarely in the office, often traveling as part of the job to properties and meetings with clients. Since a majority of time is spent outside of the office and on the road, it’s important to be cautious of possible car accidents and maintain road safety.

Still, accidents do happen, so how would you secure your business against accidents?

Nationwide, 45% of motor vehicle crash deaths in 2019 occurred in rural areas, according to data from the U.S. Department of Transportation’s Fatality Analysis Reporting System (FARS).

In contrast, California had a relatively high 68% of crash deaths in urban areas and low 31% of crash deaths in rural areas. At 39.5 million residents, California has the highest population in the country, along with the highest number of fatal car accidents, with 3,300 fatal crashes occurring in 2019.

In 2019, 50% of all drivers killed in motor vehicle crashes, who were tested, tested positive for legal and/or illegal drugs, an increase of 8% from 2018 according to the California Office of Traffic Safety.

The top reasons for fatal car crashes often include:

  • speeding;
  • intoxication;
  • drug use;
  • distracted driving;
  • auto defects;
  • bad weather, and
  • no restraint use.

Even a perfect driver may find themselves in the path of another driver who is under the influence or simply not paying attention. Therefore, it’s important to practice defensive driving at all times. Practice using driving strategies that minimize risk and help avoid accidents by:

  • obeying all road laws and signs;
  • respecting all drivers on the road, and
  • maintaining your vehicle.

Defensive Driver Training (DDT) was developed to help reduce the number, severity, and cost of vehicle-related collisions. Drivers can enroll in DDT online at and become certified in defensive driving. Many insurance companies provide discounts to drivers who take defensive driving classes as an incentive.

Broker is listed as an insured

Salespersons are employees of the broker, even when their employment is classified as an independent contractor. [Calif. Business & Professional Code §10160]

Related article:

The independent sales agent: a CalBRE violation

Consider an employee who gets into an at-fault car accident while driving to visit a prospective client. The employer’s business is named in a lawsuit and is liable since at the time of the accident, the employee was working for the employer. [Moradi v. Marsh USA (September 17, 2013) 219 CA4th 886]

To minimize risk, brokers can require their agents to add their firm as an “Additional Insured” on their vehicle insurance policy. Brokers need to receive written documentation from the auto insurer as proof the broker is covered. Save a copy of this policy and keep track of expirations and renewals of policies.

Related article:

Operating an office: Insurance coverage

Realty Publications, Inc. (RPI) publishes two employment agreements used by a broker employing a licensee to perform agency duties on the broker’s behalf. Both forms provide automatic coverage to the broker.

The Independent Contractor Employment Agreement form is used by an employing broker when entering into an agreement employing a sales agent or a broker. [See RPI Form 506]

The terms of the form:

  • call for the employee to be treated for tax purposes as an independent contractor;
  • establish the duties and earned fees of the broker and agent, and
  • detail how the fees due to the employee will be allocated and shared.

Alternatively, brokers may choose other pay and tax withholding arrangements documented by a Broker-Agent Employee Agreement form. [See RPI Form 505]

The terms of this form:

  • call for income tax withholding and tax treatment as an employee;
  • establish the duties and earned fees of the broker and agent, and
  • detail how fees due the employee will be allocated and shared.

Both forms require the agent to furnish their own transportation and carry a liability and property damage insurance policy in an amount satisfactory to the broker with a policy rider naming the broker as co-insured.

Brokers need to ensure their sales agents are properly insured to avoid liability in the case of a car accident. Brokers may need to purchase a separate business auto insurance policy or obtain a special endorsement covering their business use.

Visit our Form of the week: Agent and Broker-Associate Employment Agreements — RPI Forms 505 and 506 page for more information.