Errors and omissions can be costly for real estate professionals of all stripes – agents, brokers, business owners – whether mistakes were your responsibility or not. When this occurs clients could sue and threaten financial loss for both themselves and your business. That’s why errors & omissions insurance coverage for real estate professionals is so essential; thankfully it’s quite affordable in comparison with potential lawsuit costs; furthermore it covers past work as long as your policy remains active.
Errors will happen, and real estate brokers are no exception. While mishaps cannot always be avoided, you can lower the risks by adhering to best practices, maintaining high professional standards, and communicating clearly with clients. Unfortunately, even agents who take great care could still face legal consequences for providing incorrect or misleading property listings.
Real estate e&o insurance policies can help cover legal fees and compensation expenses should you be sued for misdeeds or omissions, with coverage varying depending on factors like brokerage size/type/transaction volume/location and properties handled. A higher deductible can help lower premium costs; experience and an absence of claims can also play a factor in pricing out e&o policies for real estate brokerage.
Most states mandate that real estate brokers and agents carry errors & omissions insurance (E&O), while some firms may require it from employees as well. Even if your state doesn’t require it, E&O insurance can still be an invaluable peace-of-mind investment – errors & omissions in real estate are common and their consequences can be severe – minor mistakes could even lead to costly lawsuits against you; an error listing a home incorrectly for sale might change someone’s mind on purchasing the property – something E&O coverage provides peace of mind when errors or omissions happen.
Real estate Errors and Omissions policies (E&Os) typically cover an array of misconduct in real estate brokerage firms, such as failing to disclose significant property defects to clients; offering poor advice; or improperly drafting documents. Unfortunately, E&O policies don’t usually cover incidents such as bodily injury or damage at open houses, for which brokers should consider purchasing general liability coverage instead.