As a real estate broker, you are responsible for many of the largest business transactions every day. Your work can be complex and time consuming – not to mention highly stressful! For this reason it is essential that you do everything possible to minimize mistakes and protect yourself from liability issues.
Mistakes do happen and even the most diligent real estate professional could make an error that causes their client financial harm. That is why errors and omissions insurance is such an essential tool for real estate professionals; this coverage helps cover legal defense fees as well as any settlement payments related to court settlements or charges brought against them.
What Does Errors and Omissions Insurance Real Estate Broker Cover? Errors and Omissions (E&O) policies exist to safeguard real estate agents, brokers, and franchises against any claims stemming from negligent or careless actions taken that lead to financial losses for clients. Among the most frequently made errors include forgetting to file paperwork properly or miscalculating mortgage loan or closing costs; providing inaccurate CMA data or encouraging clients to buy properties beyond their capacity; in essence they serve to safeguard agents, brokers, franchises from claims arising out of negligent or careless actions taken against their clients resulting in financial losses for them causing financial loss for them or others.
Most E&O policies provide protection from various types of claims:
This coverage also covers expenses related to your mistakes, such as legal fees, court costs and any restitution you owe your client. Unfortunately, certain errors that don’t fall under standard E&O policies – like dishonest acts and any that violate civil or criminal laws (like discrimination) – won’t be covered.
Most firms should have basic E&O coverage; however, you’ll want to pay close attention to any coverage offered by your firm so as to ensure you have adequate protection. Your annual coverage might decrease with each claim made against it – after defending one lawsuit it might no longer provide sufficient protection from future ones.
An E&O policy typically only covers new work. Therefore, having an independent agent review your policy to ensure you’re protected against past mishaps is of utmost importance. Consider purchasing an E&O policy that offers retroactive coverage so your firm is covered no matter when its original error took place – particularly helpful in cases when negligence happened years before you obtained a license or joined a firm. Before selecting a firm or individual agent to partner with on your future real estate projects, it’s crucial to carefully consider your options before selecting one. Doing so could save thousands in potential legal expenses. For more information, feel free to reach out today – our team of experts would be more than happy to answer any queries that you might have! We look forward to providing advice tailored specifically towards your situation!