As a real estate broker, your business deals with large sums of money and complex regulatory processes. One mistake can lead to steep fines and legal fees if any mistakes occur – hence why errors and omissions (E&O) insurance for real estate brokers is so essential. E&O protects real estate licensees, appraisers, mortgage brokers, escrow officers, transaction coordinators as well as their companies from claims or lawsuits stemming from negligence during work performance as well as financial consequences from any claims or lawsuits that arise as a result of mistakes being committed during work performance by real estate professionals or any others within their companies from financial liabilities associated with negligence claims that might arise as a result.
No matter how careful real estate agents may be, mistakes do happen. For example, if a client wants to purchase a home and the agent fails to notice that it uses a septic tank instead of city sewer systems – potentially costing the buyer thousands in addition to their down payment – and sue for their losses, E&O would cover these costs up to your policy limit.
Real estate can be a complex industry with numerous moving parts, so mistakes happen frequently. When they do happen, however, these errors can become serious headaches for both you and your clients. If a client discovers that your failure to disclose a crack in a foundation caused them thousands in financial loss or months of stress they won’t hesitate to file suit for their losses; while lawsuits are sometimes unjustified this legal process can still become financially draining for everyone involved.
Errors and omissions coverage for real estate brokers is an integral component of their risk management strategy, but independent agents and freelance brokers should also invest in this form of protection. A single error could prove devastating financially; as an independent agent managing all negotiations by themselves.
NEXT’s insurance experts will customize a policy tailored to fit the risks faced by real estate professionals, typically for an average monthly cost of $55 in E&O insurance protection for real estate professionals. You’ll enjoy peace of mind knowing your business is protected with E&O coverage from NEXT!
Below is a partial list of the most frequently excluded clauses from errors and omissions policies; for more comprehensive list please reach out.
*E&O insurance for real estate should not be seen as a replacement to general business liability or commercial auto policies; each provides different levels of coverage. Ideally, multiple policies should be purchased either individually or together in a package to maximize protection and ensure smooth business operations.
Over the last several decades, real estate’s value in the United States has skyrocketed, becoming the second-largest sector of our economy after finance. Given such an expansive marketplace, mistakes will occur and it is essential that you are protected when they do. Reach out to NEXT Insurance Group now to discover our E&O coverage for real estate brokers and other commercial lines of business.