Real estate professionals deal with high-value transactions for clients who expect optimal results. Unfortunately, mistakes do still happen and even experienced agents have been sued for negligently mishandling property deals or providing bad advice. Errors and omissions (E&O) insurance is designed to cover your business against financial liability for these claims.
Real estate professionals do not legally need E&O coverage, but it can be an essential element of responsible business operations. E&O coverage provides protection from legal defense costs, settlements and judgments related to your work as an agent or broker as well as pre-claim legal services which help defend against allegations against your work. In short, this insurance provides a critical safety net against storms that threaten their careers and livelihood.
Contrary to what some agents think, E&O insurance does not exclusively cover mistakes during the closing process. Disputes may arise even long after closing has taken place and former clients could file suits alleging professional negligence years later. Some policies offer retroactive coverage or “prior acts” coverage which addresses such matters; it is wise to understand your policy’s limits and exclusions to avoid surprises later.
E&O policies typically cover errors and omissions as well as commercial general liability and cyber liability coverage, either individually or as part of a Business Owner’s Policy (BOP) that provides all of these types of coverage in one convenient bundle – helping reduce paperwork while streamlining insurance needs.
Though many insurance companies provide E&O insurance policies, there are key differences among them. The best insurers offer wide coverage at competitive rates while providing real estate professionals and other industries with tailored products tailored specifically for them. Furthermore, they have the resources available to them that enable them to assist you with complex claims or disputes.
Not only can the best real estate insurance providers provide comprehensive coverage, they also provide rapid turnaround and competitive prices on their policies. Their premiums depend on various factors including experience, prior claims history and size of business – some companies even provide discounts that help save on products purchased.
As with any company you choose, always be sure to carefully read over the terms and conditions of your policy. Although errors or omissions rarely lead to lawsuits, it is always better to be safe than sorry and having an E&O policy allows you to build your business with peace of mind and focus on serving clients rather than worrying about potential lawsuits – this makes an E&O policy one of the best investments you can make for your career!