Brokerage reminder: buckle up and look both ways!


Real estate professionals are rarely in the office, often traveling as part of their work to properties and meetings with clients. Since the majority of the time is spent away from the office and on the road, it is important to pay attention to possible car accidents and maintain road safety.

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

Nationally, 45% of road crash fatalities in 2019 were in rural areas, according to data from the U.S. Department of Transportation’s Fatality Analysis Reporting System (FARS).

In contrast, California recorded a relatively high rate of 68% of accidental deaths in urban areas and a low 31% of accidental deaths in rural areas. With 39.5 million people, California has the highest population in the country, as well as the highest number of fatal car crashes, with 3,300 fatal crashes 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 8% increase from 2018 according to the California Office of Traffic Safety.

The main reasons for fatal car crashes often include:

  • speeding;
  • poisoning;
  • drug use;
  • Distracted driving;
  • automotive defects;
  • bad weather, and
  • no use of constraint.

Even a perfect driver can get in the way of another driver who is under the influence or who is just not paying attention. It is therefore important to practice defensive driving always. Practice using driving strategies that minimize risk and help avoid accidents by:

  • obey all laws and road signs;
  • respect all drivers on the road, and
  • maintenance of your vehicle.

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

The broker is registered as insured

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

Associated article:

The independent sales agent: a violation of CalBRE

Suppose a salesperson employed by a broker has a car accident at fault while driving to visit a potential client. The broker’s business is named in a lawsuit and is liable since at the time of the accident, the seller was working as an employee of the broker. [Moradi v. Marsh USA (September 17, 2013)_CA4th_]

To minimize risk, brokers may require their agents to add their business as a “Additional insured” on their auto insurance policy. Brokers must receive written documents from the auto insurer as proof that the broker is covered. Save a copy of this policy and keep track of policy expirations and renewals.

Associated article:

Running an office: insurance coverage

Real Estate Publications, Inc. (RPI) publishes two employment contracts used by a broker employing a licensee to perform agency functions on behalf of the broker. Both forms provide automatic coverage for the broker.

The Independent contractor employment contract form is used by an employer broker when entering into an agreement employing a sales agent or broker. [See RPI Form 506]

The terms of the form:

  • request that the employee be treated for tax purposes as a independent contractor;
  • establish the rights and fees of the broker and agent, and
  • detail how the fees owed to the employee will be allocated and shared.

Alternatively, brokers can choose other withholding tax and compensation arrangements documented by a Employee broker-agent agreement form. [See RPI Form 505]

The terms of this form:

  • claim income tax withholding and tax treatment as a employee;
  • establish the rights and fees of the broker and agent, and
  • detail how the costs owed to the employee will be allocated and shared.

Both forms require the agent to provide their own transport and hold a liability and property damage insurance policy in an amount satisfactory to the broker with a policy rider designating the broker as co-insured.

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

Visit our form of the week: Agent and Broker-Associate Employment Contracts – Forms RPI 505 and 506 for more information.

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