Real estate work can be risky business, and mistakes may prove costly. Errors and omissions insurance (often referred to as E&O insurance) for real estate is designed to cover legal costs associated with lawsuits brought by clients related to professional services provided by you or your employees.
Although E&O insurance isn’t required for every licensee, it is highly recommended for those involved with providing real estate services and selling homes. E&O policies protect you against claims involving negligent advice or services provided such as listing properties without sewer systems when they should, or failing to submit important documents on behalf of clients for lenders.
Your errors and omissions policy provides two advantages to help reduce stress and protect financial security: paying your lawyer fees as well as any compensation or damages you owe; reimbursement of expenses related to investigating and defending claims; and stress relief. It’s an invaluable way to manage risks effectively while safeguarding financial future.
How Much Does Errors & Omission Insurance for Real Estate Cost? The costs of errors and omissions insurance vary based on several factors, including your business size and past claims history. As a rule of thumb, businesses with more employees or claims tend to be considered high risk and thus must pay more for E&O coverage than businesses without these issues. Your location could also impact this premium rate as certain areas have higher lawsuit incidence and thus demand higher E&O premium rates.
Keep in mind that E&O policies often have retroactive dates, providing protection for any claims filed post-purchase. Therefore, purchasing one as soon as possible to maximize protection.
Some licensed real estate agents work for brokerage firms with an umbrella E&O policy in place, which typically provides coverage during your employment with them; however, it would be wise to purchase an individual policy should you plan on working independently in the future.
Errors and omissions insurance for real estate may seem like an extra cost, but it could save your business in case of an unforeseen lawsuit. Not only could it cover legal fees but it can also reimburse lost profits from claims filed against your firm.
Are You Searching for Affordable Errors and Omissions Coverage for Real Estate Professionals?