Errors and omission insurance can be one of the smartest investments you make for your real estate agency or brokerage, protecting both career, reputation, and financial security if a lawsuit should arise against you.

Errors and Omissions (E&O) insurance is not legally mandated for real estate professionals in all states; however, regardless of its presence it would be wise to secure such coverage as it can cover any potential legal expenses should someone file suit alleging negligence or breach of professional standards against you.

Even the most diligent real estate agents may make mistakes or oversights during property transactions, leading to costly disputes that put both their livelihood and business at risk. Errors and omissions insurance protects you against such claims up to the limits of your policy.

Errors and Omissions Insurance

Real estate transactions are an emotionally and psychologically draining experience for clients, which makes them easily distracted and overlook critical details. Clients could claim you missed information that may have dissuaded them from purchasing, such as unfinished basement or hazardous waste site nearby; other typical allegations include forgetting to have someone sign an important document at closing; providing wrong information regarding features; etc. Such mistakes could cost thousands in legal fees as well as damage your reputation significantly.

Errors and omissions policies offer coverage against legal defense costs and settlement costs up to the limits of your policy, lost revenue if an error prevents the sale of property due to mistakes on your part, damages and settlement payments should your business be sued due to property damage claims; or compensation in case they sue.

Many business insurance providers offer errors and omissions policies as an add-on to general liability and commercial auto policies, although you can purchase one independently as well.

Errors and Omissions Insurance for Real Estate Agents is often dependent on location, experience and the types of properties offered for sale or rent. Your insurers may consider your prior E&O history when setting your premium; so keeping a clean record is vital to maintaining affordable premiums. Investing in risk management tools could reduce premium costs as well as increase chances that an claim would be settled successfully.