Real estate transactions involve large sums of money and intricate legal procedures, so any misstep can lead to considerable financial losses. Therefore, real estate agent E&O insurance should be an essential requirement for agents and brokers. In this article we’ll look at ways E&O policies protect brokerages in case of claims and what criteria must be considered when selecting one.
Real estate errors and omissions (E&O) insurance provides protection in the event of negligence or inadequate work by real estate agents and brokers, also known as professional liability insurance. E&O coverage helps pay legal fees, defense costs and settlements from claims by clients against an agent/broker; some states mandate E&O insurance while many brokerages require this type of coverage from their agents.
Common real estate E&O claims include misrepresentation, failure to disclose property defects and negligent advice. For instance, an agent might advise their client not to enter an attic, only for that buyer to do just that and fall through loose floorboards anyway – in which case, the agent could be sued for failing to warn about this risk. Not only can E&O coverage provide financial support in a legal dispute but it can also protect reputation.
When selecting a real estate E&O policy, many factors need to be taken into account, including coverage limits, deductibles and exclusions. When selecting your provider it would be beneficial if they specialize in this kind of insurance as they will have more knowledge regarding risks specific to this industry. It is also wise to check reviews online or seek recommendations from colleagues regarding reputation of this particular provider.
E&O insurance may be costly, but it’s an essential investment for any real estate brokerage. A single lawsuit could have devastating repercussions for smaller brokerages if not addressed swiftly; by investing in quality E&O coverage they can ensure financial wellbeing while continuing to grow their business with confidence.
Victor is proud to provide real estate E&O insurance for agents and brokers through its REALTOR Benefits program, in collaboration with the National Association of Realtors. This program offers NAR members access to cutting-edge coverage for errors and omissions related to real estate services at member pricing – learn more about what coverage may be available via this program and contact one of Victor’s advisors today to explore your options!