Real estate professionals are responsible for providing accurate information to clients and managing complex property sales, rentals and purchases. A single mistake during any of these processes could cost clients thousands of dollars in damages; errors and omissions insurance or professional liability covers such costs.
Many states mandate errors and omissions insurance for real estate agents and brokers, as it provides protection from legal expenses in case a client sues over unsatisfactory work or an unfortunate mistake on your part. Sometimes clients require proof of coverage prior to signing contracts.
The PBI Group has provided over 50,000 real estate E&O policies to real estate firms nationwide. Our experts understand the unique risks faced by real estate firms and can guide your selection process, ensuring that your coverage needs are fulfilled.
Do I Need Errors and Omissions Insurance in California? While California doesn’t mandate errors and omissions insurance for real estate professionals, that doesn’t mean it shouldn’t be purchased – The National Association of Realtors recommends all members purchase errors and omissions coverage as a best practice for their real estate businesses.
Errors and omissions claims are commonplace in real estate. Even experienced agents may make errors that cost clients money, such as not disclosing all aspects of a home’s history or failing to forward vital documents for closing.
Mistakes that cause client harm can be costly and difficult to prove in court. For instance, working on the sale of an expensive home and failing to disclose that it connects to a sewer system rather than a septic tank could cost them significant sums of money in repairs, leading them to file suit against you as their realtor.
Without errors and omissions insurance, your legal expenses to defend yourself in court could rapidly drain your savings while damaging both your bank account and reputation. Errors and omissions coverage provides invaluable protection from costly mistakes that arise while providing excellent client services. You’re sure to find something affordable from multiple providers. Most NEXT customers can obtain an errors and omissions policy for $25 to $75 monthly, with premiums depending on individual risks and other considerations. You can customize your policy according to your specific needs by including other policies like general liability or commercial auto coverage in it – these additional policies cover more of the risks inherent to operating real estate businesses.