Real estate professionals – be they brokers, agents, inspectors or mortgage specialists – manage large financial transactions every day. Even when performing to the best of your ability and maintaining an impeccable reputation, mistakes may occur that threaten both business and personal assets if costly litigation ensues against them. That is why it is imperative to safeguard oneself with real estate E&O insurance policies.
Real estate errors and omissions insurance (REOI) provides professional liability coverage that safeguards real estate professionals against claims of negligence or failure to perform their professional duties, protecting anyone involved with real estate from home inspectors to appraisers to brokers and agents. Errors and omissions often arise from either an act or failure to act that results in financial loss for a client, such as misrepresentation, miscalculation, failure to disclose material facts or other circumstances that lead to claims being brought forward against professionals in real estate industry such as home inspectors being sued over errors made against them by clients themselves resulting from misrepresentations miscalculation failure to disclose material facts or any other event leading to claims being filed against real estate professionals by them being covered under professional liability coverage.
Errors and omissions don’t have to lead directly to legal action; they can still damage client relationships and lead to financial losses in this high-risk industry. Even one mistake could be enough to damage your reputation and end your career, which is why it’s essential that real estate e&o insurance programs be reviewed carefully – being mindful of scope coverage, types of damages covered, deductibles and limits before selecting the most suitable policy may take some time and requires consulting an agent and conducting risk analyses.
Even if your state doesn’t mandate E&O insurance, investing in one is still wise for real estate professionals. E&O protects personal assets, shows that you take your work seriously and enhances credibility and trustworthiness as a professional.
Real estate error and omission insurance (REOI) typically does not cover damage to customer properties or to your own properties, which are covered by other commercial policies such as general liability policies. However, certain policies may offer an endorsement which covers this type of damage.
Be mindful of when and who your real estate e&o insurance covers you as this could impact costs and limits. Some insurance providers only cover licensed real estate professionals while others may exclude employees or personal assistants; it is essential that these terms are clearly outlined in your policies.
Ensure your real estate errors and omissions insurance program provides comprehensive coverage that suits your industry by comparing multiple policies based on price, customer service, brokerage reputation, responsiveness and convenience. Also take note of what kind of errors and omissions are covered as well as when coverage commences and ends – many policies only cover claims made during their term of coverage.