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What Is Errors and Omissions Insurance in Real Estate?
Errors and omissions insurance helps protect real estate businesses from mistakes made in the professional services given. It can help real estate brokers, agents, appraisers and other real estate professionals. So, if a client sues your real estate business for a mistake in the services given, errors and omissions insurance for real estate can help cover your legal costs. This coverage is also known as E&O insurance and professional liability insurance.
What Does Errors and Omissions Cover in Real Estate?
As a real estate professional, your clients trust you to give them accurate advice and information about homes. If you miss an important detail, it can cost them money and result in a lawsuit against your business.
E&O insurance for real estate businesses can help cover claims of:
- Negligence
- Misrepresentation
- Inaccurate advice
- Errors
- Omissions
If a client sues your real estate business, E&O coverage can help pay your legal costs, including:
- Attorney fees
- Court costs
- Administrative costs
- Settlements and judgments
You can also increase your real estate E&O insurance coverage if you buy an extended reporting period (ERP) for your policy. This means you’ll have more time to report a claim after your policy expires.
Real Estate Errors and Omissions Claims Examples
Some examples of claims where errors and omissions insurance can help real estate professionals include your:
- Company hosting an open house for a client, but not mentioning a structural flaw in the home.
- Employee describing a property incorrectly in a home listing.
- Business giving incorrect legal advice to a client when they’re buying a home.
Leer más claim examples and see how E&O insurance for real estate businesses can help.
Who Needs E&O Insurance for Real Estate?
Errors and omissions insurance is intended for many businesses and professionals in the real estate industry, including:
- Agents
- Brokers
- Appraisers
Be aware that state business insurance requirements vary. For example, some states require real estate agents to have E&O coverage, such as:
- Nebraska1
- North Dakota2
- New Mexico3
- Rhode Island4
- Texas5
Because these requirements can differ between states, it’s a good idea to make sure you understand your local laws.
Get a Quote for E&O Insurance in Real Estate
We’re an insurance company that’s been helping protect businesses with real estate insurance for over 200 years. You can count on us to help you get the right coverage for your risk management plan. To learn more about E&O insurance for real estate, obtener una cotización online today.
4 Rhode Island Department of Business Regulation, “Requirements/Application for Reciprocal Real Estate Salespersons”