As a real estate broker, it is likely you are handling large sums of money and complex property transactions daily. Under such pressure, mistakes can easily occur; errors and omissions insurance (E&O) provides relief against accusations of professional negligence whether justified or not; it should be essential for any broker, agent, franchisee, or firm who want to avoid financial ruin due to legal action over mistakes they’ve made.
Even though we strive to prevent errors from happening, they do occur and when it comes to real estate even the slightest misstep can have serious repercussions on both your bottom line and client trust – especially for larger firms dealing with many clients each week.
Combine that with the fact that property transactions typically involve hundreds of thousands of dollars, and it becomes apparent how one mistake could result in an expensive lawsuit. Fighting back against such lawsuits as an independent broker may prove even more challenging; without the financial clout of larger firms behind you, defense may become even harder to come by.
Errors and omissions coverage for real estate brokers is vitally important, as it protects them against legal expenses should a client sue due to mistakes that hurt their business. Some states even mandate errors and omissions policies for licensed real estate professionals.
Contrasting general liability coverage that typically only includes bodily injuries or property damages related to services provided, errors and omissions insurance for real estate provides damages associated with errors made when providing specific services – for instance incorrect listing in home listings, incorrect advice given during transactions or failing to meet deadlines set by customers.
Error and omissions insurance for real estate is designed to both combat claims as well as safeguard your reputation by covering any incurred costs due to errors or omissions on your part that damage customer goods and services you provided as a result of them. This is especially useful since some claims could be perceived rather than fact-based.
Victor has developed several risk advisory resources designed to help your real estate team understand the significance of E&O coverage, including common claims scenarios that illustrate its utility for businesses. NAR members can access these free resources as part of our online library.