Just as doctors need malpractice insurance, real estate agents and brokers also require errors and omissions (E&O) coverage. In some states it is required, while it’s highly recommended in all others. Not only does E&O cover your own financial loss from making mistakes in business decisions; it also protects clients who suffer financially due to your actions.
What Is Errors and Omissions Insurance for Real Estate? E&O insurance for real estate provides professional liability protection against any claims brought about by the performance of your services as a real estate professional, including any legal fees or settlement costs that arise as a result. Whether caused accidentally or intentionally, E&O policies cover costs related to damages to clients or company reputation that occur as a result.
Be mindful that the cost of E&O insurance for real estate varies significantly across jurisdictions, due to different state laws and insurance requirements. Your history could also have an effect on how much premium you owe as insurance companies view you as more or less of a risk depending on how experienced and successful you are in real estate investing.
National Association of Realtors(r) has long assisted its members in selecting the ideal insurers, and now it’s easier than ever. NAR’s REALTOR Benefits(r) Program has teamed up with Victor to offer real estate agents and brokers state-of-the-art coverage at exclusive member rates.
NAR and Victor offer an extensive range of risk advisory resources, such as claim scenarios to highlight common errors in real estate. With this guidance, it may help your clients better serve themselves while you avoid making similar errors yourself.
Real estate can be an intricate industry, making mistakes easy. Even the most knowledgeable agents and brokers may make an error that leads to legal action against them, especially when handling large sums of money and complex regulatory processes. That is why having E&O insurance in place can provide invaluable coverage against costly lawsuits or errors in practice.
However, E&O insurance won’t cover everything; for instance if you accidentally damage customer property while showing it is usually covered by general liability and not your E&O coverage. Furthermore, if there is pollution near the property that could pose health and safety risks to potential buyers then this information must likely be disclosed since this could present health and safety risks to future buyers.
Be mindful that E&O insurance for real estate cannot protect against claims involving fraud or criminal activity – these must be covered by other forms of insurance policies. Therefore, it’s essential to consult an insurance specialist in order to secure adequate coverage for your real estate business. NEXT tailors each client’s error and omissions insurance policy specifically to their unique requirements, providing exactly the coverage needed at an affordable cost.