Errors and Omissions Insurance for Real Estate provides business owners with protection from legal claims stemming from professional advice or services they provide, commonly known as errors and Omissions Liability or E&O insurance. Covering legal costs to defend against allegations of negligence or incompetence even if the lawsuit proves unfounded; errors and Omissions policies are an indispensable business necessity for real estate agents, brokers, home inspectors and other professional service providers.
Even the most diligent real estate professionals may face claims. For instance, if a client alleges an agent failed to disclose structural issues properly, an E&O policy can cover attorney fees, court costs, judgments and settlements up to its limit as well as damage caused by negative customer reactions due to mistakes. Additionally, this coverage can protect their reputation should something go amiss.
An adverse legal ruling can seriously compromise a real estate professional’s reputation and finances, so many states mandate E&O insurance for license holders; though individual mandates may differ. Some may dictate coverage scope or minimum policy limits while others might dictate whether surety bonds are also mandatory.
E&O insurance for real estate provides coverage against both legal costs and repairs or replacements that might result from claims, as well as providing other useful benefits, including:
E&O insurance is often offered as an add-on to other forms of commercial coverage, yet it’s essential that prospective purchasers carefully read each policy’s details prior to making any commitments. Some E&O policies cover only claims that occur during their policy period while others may feature deductibles and per-claim limits along with exclusions and other terms which should be reviewed thoroughly prior to purchasing one.
Other types of commercial coverage that may be combined with an E&O policy include general liability and property/cargo policy insurance. General liability covers accidents or injuries occurring on the premises of real estate businesses while property/cargo policies cover vehicles owned by them. Furthermore, real estate E&O policies can often be purchased with an umbrella policy to provide extra coverage in case judgments or settlements go beyond their E&O limit.
NAR provides its members with a simple process for securing real estate E&O coverage through its REALTOR Benefits program, in partnership with Victor Insurance Managers Inc. This convenient program makes obtaining state-of-the-art protection easy; members can quote, bind and issue policies online anytime.