Errors and Omissions Insurance for Real Estate Agents Many professions require their employees to carry errors and omissions insurance, including real estate agents. These policies protect professionals in case of mistakes made while making advice available to clients that leads to financial loss for them. In case a lawsuit is filed, this coverage typically provides coverage against legal costs as well as judgments or settlements awarded against their professional clientele.
Real estate agents and brokers frequently deal with large transactions involving emotional clients, making mistakes that cost clients money an easy reality. Even experienced real estate professionals may make errors that lead to legal action from clients; an error like not listing home square footage could prompt an action by homebuyers against agents and brokers; in these instances, E&O policies provide coverage up to certain limits to cover legal fees and judgments from these lawsuits.
E&O insurance not only protects against costly claims, but can also enhance a real estate professional’s reputation by showing their dedication to professionalism and shielding their clients from costly liabilities. Clients tend to feel more at ease working with professionals that carry E&O coverage; clients appreciate knowing their agent has plans in place for any potential missteps that occur and is willing to put forth effort towards correcting them quickly and efficiently.
Insuranceopedia Explains Errors and Omissions Real Estate Insurance
Some states mandate every active real estate licensee have Errors and Omissions (E&O) insurance. RISC has contracted with Continental Casualty Company, a CNA insurance company, to continue providing state group E&O policies that meet or exceed minimum coverage requirements in Tennessee for individual as well as firm licensees. To enroll in our Tennessee Group E&O program simply choose your desired coverage options then complete a Supplemental Enrollment form before returning with payment made out to RISC.
Price for real estate E&O insurance varies widely depending on a number of factors. Coverage amount, deductible amount, brokerage risk assessment process and years of experience all affect its final cost. Raising deductible can help to bring costs down; while experienced brokers with no claims history could qualify for reduced premiums.
Errors and Omissions insurance is usually an affordable solution for real estate professionals, whether purchased individually or as part of a business umbrella policy. It’s essential that all policies be carefully read to understand exactly what coverage applies; some E&O policies exclude temporary employees or claims stemming from activities outside the scope of your business – for instance fraudulent activity may not be covered under certain policies.
Cost estimates for E&O real estate insurance policies typically range from several hundred dollars up to thousands annually, depending on coverage limits and other variables. To obtain an accurate cost estimation, it’s best to speak with an insurance specialist and have an extensive risk analysis done.