Real estate brokers may be held liable for mistakes or omissions they commit in working with clients, which could prove financially devastating and damage their professional standing. Errors and omissions insurance for real estate brokers is available to cover legal costs associated with defending or paying claims as well as lost earnings related to these circumstances.
Some states mandate real estate agents carry professional liability (E&O) insurance; even when this coverage isn’t mandatory, having it can still be beneficial in many ways. E&O coverage helps safeguard agents’ personal assets while upholding professional integrity and creating client trust; in addition, having it can provide safety net protection in an industry known for being complex and litigious.
Mistakes occur more frequently than you realize in real estate brokerage, even for experienced agents and brokers. Even experienced brokers can miss details on a property or provide inaccurate advice; errors and omissions coverage provides vital financial protection from lawsuits brought by dissatisfied clients.
Failing to send signed documents out, or informing sellers they have an older sewer system when actually it has a modern septic one can have costly repercussions for brokers and their clients alike. Not disclosing hazards or defects which pose potential threats may lead to lawsuits for failing to disclose such hazards or defects that could pose significant harm or injury – both errors could cost clients dearly in terms of money lost due to costly legal proceedings against the broker in question.
Real estate brokers’ costs of E&O insurance can vary widely, depending on the size, scope and coverage limits selected for their business. Premiums tend to be higher for larger firms with less experience or poor claims histories; however, a firm could save money by selecting claims-made rather than an occurrence policy.
While every policy’s terms and conditions will differ, a quality real estate E&O policy typically provides broad coverage against errors and omissions, including legal fees associated with defense costs when an agent or firm is named in a lawsuit. Furthermore, additional endorsements can often be added to expand upon this protection for real estate brokers.
As part of their coverage, most Errors & Omissions Insurance policies exclude transactions involving developed or constructed properties owned by either the insured, their immediate family members, or third-parties with which they have financial ties. In such transactions, surety bonds should also be obtained as they will serve as financial guarantees that ensure you comply with contract terms and regulations. To protect your real estate business today, submit Insureon’s quick online application to receive free Errors & Omissions Broker Quotes quickly! Compare multiple quotes before selecting which policy best meets your requirements!