As a real estate agent, your time may be divided among engaging clients, showing properties and negotiating deals – but even the most experienced agents can make mistakes that lead to legal disputes. When those mistakes lead to legal battles, having proper insurance coverage in place is absolutely critical. That’s why many states require real estate agents carry errors and omissions insurance (E&O), which provides coverage against legal fees settlements judgments associated with mistakes such as failing to disclose property defects or providing inaccurate valuations for homes.
As you shop around for an E&O policy, be mindful of its exclusions as well as inclusions. For instance, certain E&O policies exclude damages if an agent was found guilty of dishonest conduct or willful discrimination; some also exclude them if claims arise from illegal activities like sending spam emails or cold calling that violate civil or criminal law.
Another point to keep in mind when purchasing E&O insurance is whether it covers work performed outside the scope of an agent’s duties. For instance, if they agree to oversee renovation on a client property but then mess it up badly and are no longer covered under E&O policies.
An E&O policy often does not cover work considered a breach of fiduciary duty, creating significant worry among clients as agents can be sued if they do not adhere to certain standards in terms of providing timely or accurate advice.
Cost of real estate agent E&O insurance varies significantly, depending on factors like brokerage size and types of properties handled. Some brokers may include their E&O policy in their monthly desk fee while others will need to obtain it separately.
Real estate agents who possess errors and omissions insurance can have peace of mind knowing they will be prepared for whatever comes their way, from simple errors or disputes, through legal battles while still building client trust. To learn more about E&O insurance options available from Victor, reach out today – one of our insurance specialists will assist in finding coverage to protect both career and business; NAR members can even take advantage of discounted member pricing on Victor’s cutting-edge E&O system! Request a quote online now to start protecting both!