Real estate agents and brokers of all experience levels may make mistakes that lead to expensive legal battles, including failure to disclose property defects, inaccurate advice or clerical mistakes in paperwork. A reliable errors and omissions insurance real estate California policy is important in these instances for covering legal fees as well as expenses to defend their business and safeguard their reputation.
Real estate professionals should also take the necessary steps to purchase general liability insurance as a complement to errors and omissions insurance. This type of business policy typically pays out in cases of property damage to customers’ properties, injuries sustained at work by employees working there, as well as covering legal action from customer claims of negligence or improper work done at their firm.
Some states mandate real estate professionals carry errors and omissions (E&O) insurance; others simply recommend it. Many mortgage lenders and real estate agencies, however, will refuse to do business with an agent or broker who doesn’t show proof of E&O coverage – this provides financial protection in case an client dispute arises over your professional services.
When purchasing real estate E&O insurance policies, it’s essential that you find an insurer with strong financial strength ratings. This will give you peace of mind knowing that there will be enough assets available if a claim arises and to provide timely notification to your insurer in the event that one does. When documenting incidents that may lead to claims promptly as they happen will ensure evidence remains preserved should a lawsuit arise and notify them as quickly as possible should one arise if necessary.
Although most real estate errors and omissions policies cover most forms of property-related disputes, it’s essential that buyers be aware of any exclusions before purchasing one. Most E&O policies won’t cover intentional misdirection or fraudulent activity while some may exclude certain issues like HOA-related disputes altogether.
Finding a quality real estate E&O policy involves shopping around and comparing quotes. When searching, look for providers with user-friendly interfaces that cater specifically to small businesses. Furthermore, consider companies who also offer other business policies, such as general liability or commercial auto, to create more comprehensive packages for coverage.