Real estate can be an extremely complex and competitive industry, making mistakes common for agents and brokers. Errors and omissions (E&Os), also known as mistakes that cost money or damage reputation are potentially devastating consequences to any career in real estate – but you can protect yourself with real estate E&O insurance to hedge against such risks.

E&O (Errors and Omissions) insurance provides real estate agents, brokers and franchise/firm owners protection from legal claims resulting from errors and negligence in performing their professional duties. It pays for attorney fees, court costs and settlement costs that arise as a result of claims/lawsuits; however it does not cover bodily injuries or property damage as this would usually fall under a separate general business liability policy policy.

E&O insurance may be mandated in some states for licensed real estate professionals; even if it’s not mandatory in yours, having this coverage can still help avoid costly litigation and secure client trust. Furthermore, many clients require this form of coverage before agreeing to work with you.

Some states mandate errors and omissions insurance for licensed real estate agents, while others simply suggest it as best practice. But regardless of your state’s requirements or recommendations regarding errors and omissions coverage, having errors and omissions coverage can protect your business in case a legal dispute ensues that forces you to pay out significant damages to clients; its cost usually far outweighs potential financial loss from legal action against an agency.

How Much Does Errors and Omissions Insurance for Real Estate Agents Cost? The cost of errors and omissions coverage varies based on factors like business structure, deductible level, insurance limits and history of claims experience and reputation of your brokerage – higher deductibles tend to lead to lower premiums while experience with claims filing can qualify you for discounts; additionally if your brokerage owns multiple locations this coverage could even be paid for by them directly!

As an entry-level agent at a brokerage firm, your monthly desk fee likely includes errors and omissions insurance; some firms even provide group policies for associates associated with them. Should you decide to leave said firm however, an individual policy will need to be purchased in order to remain protected.

Errors and omissions insurance does not protect you against claims for illegal acts, such as fraud or misrepresentation, however; you can protect yourself against these risks with a surety bond, which in certain states is mandatory when selling real estate.