Real estate professionals face an important and expensive task in helping their clients buy or sell property, often an emotional experience for both. Guiding clients through the process and explaining all potential pitfalls along the way requires real estate professionals to be diligent; mistakes will inevitably happen no matter how careful you are; therefore it is crucial for real estate brokers to have professional liability insurance in place as a safeguard against mistakes that could prove costly – thus it is essential that real estate brokers carry this coverage.
Errors and omissions (E&O) insurance for real estate agents is designed to shield them from lawsuits and financial loss caused by professional negligence in their performance of duties, such as legal fees, court costs and settlements for claims related to covered claims. Furthermore, this coverage can provide business interruption costs coverage as well as defense cost limits and deductibles to ensure you have sufficient protection tailored specifically to meet your unique needs.
An E&O policy typically excludes bodily injury or damage to client property, which are best covered by general liability insurance (GCL). Furthermore, specific risks like title insurance issues, property management and self-dealing by brokers will typically not be covered; having other forms of coverage in place can fill any gaps left by an E&O policy’s exclusions.
E&O insurance premiums may differ significantly based on your chosen coverage limits and deductibles, and your brokerage’s unique risk profile. Brokerages with more transactions, experienced agents or no claims history typically receive lower premiums.
Finding an E&O policy tailored specifically for your real estate firm requires speaking with an insurance agent. He or she can perform a risk analysis and help identify suitable coverage that meets all of your business requirements.
To ensure your brokerage has adequate E&O insurance, it’s wise to review the state requirements. Tennessee Real Estate Commission selected RISC to continue providing its state group E&O program which offers affordable coverage to each active licensee in Tennessee – surpassing even their minimum requirements!