Real estate brokers help guide their clients through what can often be an emotional process of buying or selling their home, which involves many variables they cannot control – mistakes may cost their client money! That is why errors and omissions insurance for real estate professionals is such an essential safeguard.
Errors and Omissions insurance for real Estate brokers provides them with protection in case a claim from one of your clients alleging that the professional services you provided caused financial harm or loss to them. It will often cover legal fees, settlement costs and court awards up to your policy limits.
Errors in real estate transactions can often have serious repercussions. Failing to disclose foundation issues or submit essential documents at closing may prove disastrous – even if your claim is without basis, the legal costs that result may force you to defend yourself and cover legal defense fees, which quickly mount up.
Most states don’t require real estate professionals to carry errors and omissions (E&O) insurance, but you should strongly consider doing so regardless. Customers, bank partners or real estate franchises may require you to show evidence of coverage before entering into business agreements with them.
Errors and Omissions insurance (also referred to as E&O insurance) provides protection from claims by clients alleging poor-quality work or negligent actions by businesses, their employees and any related professionals such as real estate brokers, agents, appraisers and appraisers. It’s a form of professional liability coverage which covers businesses as well as their employees – including real estate brokers, agents, appraisers and others related professionals.
Victor Insurance Managers LLC and the National Association of Realtors offer real estate errors and omissions insurance through NAR REALTOR Benefits, an innovative program which makes it possible to quote, bind and issue policies online – no matter the time of day or night!
How Much Does Errors and Omissions Insurance for Real Estate Professionals Cost?
Errors and omissions insurance costs vary for Realtors depending on a variety of factors, including agency size and litigation history. Larger agencies with more employees tend to have higher premiums while small businesses with few employees typically experience more cost-cutting rates.
As your state of business resides will also play an impactful role on your insurance rates, typically New York has higher premiums due to an increased potential for malpractice suits due to more real estate professionals in New York than anywhere else nationally. Yet despite these increased risks, E&O insurance remains affordable in this state and should always be purchased so as to prevent expensive litigation later down the line. In addition to Errors and Omissions insurance plans and commercial auto policies are highly recommended as an added precaution against litigation costs in future years.