Errors and Omissions (E&O) insurance for real estate agents and realtors

/ BLOG

Errors and Omissions (E&O) insurance for real estate agents and realtors

The real estate business can be a highly litigious one due to the significant sums of money involved (for most people, the purchase of a house or apartment will be the most expensive outlay they make in their lives) and the potential for deals to fail for a number of reasons. Often these reasons may not have anything to do with the action of the real estate agent or broker who has provided their contracted services in a professional and efficient manner, but this doesn’t always protect against lawsuits. Even if a lawsuit has no foundation, it will still have to be defended in court, and that means legal fees will be payable, frequently at a level that could threaten to bankrupt the realtor or broker.

This is where Errors and Omissions (E&O) insurance* comes in. Should you, as a real estate professional, have to face such a lawsuit, your E&O insurance, if correctly chosen, will help to save you money and perhaps even save your business when you are accused of committing errors, omissions, or neglecting your professional duties. However, it is important to note that many insurance policies contain caveats to protect the insurer in terms of exclusions in certain cases. If an agent has acted dishonestly or criminally, that will void their insurance policy; many policies also exclude claims arising from properties that are found to be contaminated by pollution. Policies may also contain clauses that impose deductibles on legal costs and damages if it is shown that the claim against the agent has merit.

If a claim is brought against a real estate agent who holds an Errors and Omissions insurance policy, the insurer will step in to defend the case on behalf of the agent, appointing legal counsel as appropriate, employing expert witnesses, commissioning reports and so on. If the case is found by the court to have merit, the insurer will meet the costs of settlements or judgements imposed on the agent within the liabilities defined in the insurance policy. This offers a significant level of protection to those working in real estate who may be facing significant financial loss resulting from lawsuits brought by clients.

Estate agents often purchase insurance from a broker, and this frequently incorporates Errors and Omissions insurance as part of an overall package of services provided by the broker. Many agents fail to properly scrutinize the coverage provided; they are simply satisfied in knowing that it is present. This is a serious error, as you may not find out that you have inadequate coverage until it’s too late to rectify matters. In a number of jurisdictions, it is legally compulsory to purchase this sort of insurance from your broker in order to operate, but this can mean that you don’t have many options regarding the type of coverage, amount insured for, exclusions and so on contained within the policy. Sometimes it can appear that you are insured for a significant sum to cover any liabilities, but in fact this sum covers all the agents working for a particular broker and the sum available to any individual agent could be much smaller.

As noted above, Errors and Omissions policies frequently specifically exclude some types of events from their coverage. This includes any claims arising from an agent behaving dishonestly or criminally, and any claims arising from a property that has been damaged by pollution. Additionally, policies frequently exclude any damage resulting to the property of a third party from an agent’s errors and omissions, and also any physical harm/death caused by an agent’s actions.

Deductibles are frequently payable with Errors and Omissions insurance; these are the sums for which an agent is personally liable, generally the first X thousand dollars of any legal costs or damages. Policies may impose two types of deductible, one payable on the legal costs and one payable on any damages awarded. A number of brokers offer Errors and Omissions insurance with no deductibles, but this will be conditional on the agent being able to produce complete documentation for every stage of the transaction in question, and insurance may be invalidated if they cannot.

It cannot be overstated how important it is to keep complete records as an estate agent. Legal cases arising from client complaints can be extremely complex, with brokers being involved in lawsuits and also potential complaints to state real estate commissions. Having full documentation of every stage of your involvement with the client may enable you to avoid legal action in the first place, or, if it does proceed, help you to win the action. Make notes of all your meetings with clients, including the date, who you spoke with, and what you spoke about. Save all your text messages and emails from clients in files where you can easily access them when necessary. Don’t be embarrassed to ask clients to sign statements about their actions, particularly if they are not following your recommendations; for example, if you recommended that a client should have a home inspection carried out on the property they were buying, and they refused, if they later complain about some defect that would have been picked up by a home inspection then having a signed acknowledgement that they refused to have one is extremely useful. This might deter a client from taking action, or, if they decide to press ahead, it is extremely useful evidence to give to your insurance company to help them defend the claim.

 

*As with any insurance, coverage will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained in this article is general only.  Coverage for claims on the policy will be determined by the insurer, not BizInsure, and will depend on the specific facts and circumstances involved.

Compare quotes in minutes with no obligation to buy

More than 6,000 customers covered by top-rated insurers.

Get instant quotes

Compare quotes in minutes with no obligation to buy

Get Quotes
MOVING FORWARD, I WILL BE SENDING ALL OF MY BUSINESS TO THIS COMPANY !!!! Incredible customer service!!! Thanks
THEODORE WELLS
THEODORE WELLS
19:49 09 Sep 21
Daniel Patrick Sullivan
Daniel Patrick Sullivan
16:49 07 Sep 21
Their representative clearly explained different kinds of policies to help me select the one appropriate for my needs and then helped me enroll by phone painlessly. By the end of the call, I had a policy in place.
Dissent Doe
Dissent Doe
22:21 02 Sep 21
Sheree Williams
Sheree Williams
19:39 27 Jul 21
Eugene was Awesome!!!!
Lakesha G
Lakesha G
17:19 21 Jul 21
Excellent solution for writers and authors professional liability policy as well as coverage for copyright and trademark infringement. Service was prompt and excellent.
Lane
Lane
18:22 22 Jun 21
Jugrid Ombisi
Jugrid Ombisi
16:26 15 Jun 21
Done in less than an hour!
William Opperman
William Opperman
00:30 02 Jun 21
Efficient, and great value. The agent was able to give us a quote and a new policy in a short period of time. Thank you
Brenda Jones
Brenda Jones
20:30 24 May 21
I had a great experiencing obtaining several of my insurance needs as a landscaping company here in Northern Colorado. BizInsure's team took care of my needs and was very responsive to help with paperwork needed to secure a potential client account!
Arik Solberg
Arik Solberg
16:34 10 May 21
Adj Ako
Adj Ako
16:47 05 May 21
Very efficient they were able to help me out with my request promptly....highly recommend this companyI am very happy to have them
Elba Perez
Elba Perez
18:50 26 Apr 21
I need a help getting errors and omissions insurance along with general liability. Jose was very friendly informative and was very patient with me during the process. He found me some of the best rates for the coverage that I needed. Highly recommend
Casper Martinez
Casper Martinez
19:51 20 Apr 21
I had numerous conversations with several business insurance agents over a month's time. I also had several conversations confirming the policy inclusion/exclusions and asked many questions. My BizInsure agent was professional, knowledgeable and most important—detail oriented. Even after having an initial conversation a month earlier he knew and *remembered* all my personal/professional insurance needs. When I asked for additional information on the third call he was able to provide me with details very quickly. He was also VERY patient. That is a big plus in my opinion. It illustrated a high level of respect for my needs. I also found when I called back and asked to talk with the initial agent, the person who answered the call was able to get in contact quickly and my agent responded and returned the call within 5-10 minutes. The transaction was smooth, and I think it's a good sign should I ever need to make a claim. I highly recommend BizInsure.
Poetic Films
Poetic Films
21:00 07 Apr 21
Sandra Darjean-Murphy
Sandra Darjean-Murphy
17:48 31 Mar 21
Jusephine Ghong
Jusephine Ghong
17:58 23 Mar 21
The rep was extremely helpful actually lowered my quote and made sure I was covered to fit my needs with my growing business! 5star!!
Franklin Behm
Franklin Behm
19:04 16 Mar 21
Excellent service and prices.
Cassiopée V Lapierre
Cassiopée V Lapierre
23:13 09 Mar 21
S & S Professional care llc Home Health Agengy
S & S Professional care llc Home Health Agengy
04:15 24 Feb 21
Mr. Daniel Scott was very responsive to my professional needs.
Stephanie Woodruff
Stephanie Woodruff
17:38 18 Feb 21
Eugene deserves a raise! First time purchasing insurance and he made the process so simple for me. His patience and attention to detail left me feeling confident in my decision to choose BizInsure. Gracias Eugene!
Esined Perez
Esined Perez
23:32 17 Feb 21
DIVINE FIJIANS HOME CARE SERVICES
DIVINE FIJIANS HOME CARE SERVICES
22:49 05 Jan 21
The customer service provided by Jose was outstanding. He explained everything in a very clear/logical way and answered all of my questions. After providing all the information to obtain general liability insurance, Jose sent me the declaration page of the insurance for review. All of the information matched what I provided over the phone and there were no typos. The next day I called back to purchase the insurance which was easy and fast. Overall, my experience with BizInsure including the customer service by Jose exceeded my expectations.
Joe Wajdula
Joe Wajdula
03:29 12 Dec 20
Hiscox/BizInsure made getting Liability Insurance very easy and reasonable.I expected it to be a long and complicated process and it was a nice surprise that they made it so uncomplicated. Thank you. Lisa
Lisa Word
Lisa Word
21:51 24 Nov 20
Eugene was incredible. I called 4 other brokers before him who were impossible to get any help.
rhonda hale
rhonda hale
23:26 12 Nov 20
Owner (LPN)
Owner (LPN)
23:19 06 Nov 20
Cincere Browdy
Cincere Browdy
15:16 29 Oct 20
Very quick to get in touch with you and good with follow up. Had some trouble retrieving my quote to log into my account initially but Daniel assisted me and the changes were made to get me into my account. Great value for the money.
Fran Sutton
Fran Sutton
16:34 20 Sep 20
Very happy to be insured with this company. Professional, Timely, very helpful. Thank you Juan, you made it so much easier for me to understand.
Aileen Day
Aileen Day
19:55 15 Sep 20
This company responded when I needed them to respond while facing a deadline. They are an excellent choice for business Insurance.
Michele Harris
Michele Harris
01:52 12 Sep 20
Jose Quintero took such great care of me and was very patient explained everything I did not understand and got me set up quickly. Fabulous customer service
Christina Rose
Christina Rose
02:41 27 Aug 20
I can't say enough good things about Daniel Santos kind and effective communication skills as an insurance agent. Daniel was so pleasant, friendly and efficient with helping me obtain insurance as a teacher. If I were to give Daniel a grade, he has earned an At . He made the process easy to understand, it was far easier than what I anticipated. Nancy S.
Nancy Sloan
Nancy Sloan
00:47 26 Aug 20
I was in need of professional liability insurance for my sole proprietorship. A friend referred me. Everythng was quick and simple and AFFORDABLE!
hope jones
hope jones
20:31 25 Aug 20
If you need Private Home Care Provider insurance for your company, BizInsure, LLC can get it for you!
Pamela Curry
Pamela Curry
16:45 24 Aug 20
Cameron Peek
Cameron Peek
19:25 24 Jul 20
Great and fast service!!!! The representative was very professional!!!!
Tanya Sweet
Tanya Sweet
19:51 14 Jul 20
I was tryi9ng to find commercial liability insurance for my new comp-any and BizInsure was easy to use and very affordable which is great for me as a new business.
Jimmy Smith
Jimmy Smith
19:01 14 Jul 20
Great service, but they're also extremely patient. I called over a month ago for specialized E & O coverage, and Bizinsure was able to put me in touch with an extremely reasonable quote. Absolutely invaluable time and monetary savings to be had by going through these folks. If you can-- ask for Anthony. Absolute gem of a human.
James Lang
James Lang
18:19 02 Jul 20
Ken M
Ken M
23:21 28 Jun 20
Great service insurance prices are great for professionals looking to get insurance for businesses....
Rhonda Gray
Rhonda Gray
22:34 22 Jun 20
The provided very professional service and made the process easy.
Paul Rising
Paul Rising
21:51 04 Jun 20
Bradley Hoyle from the Biz Insure team was excellent to work with. Everything was quick and smooth. Great service, much appreciated!
Kristene Smith
Kristene Smith
02:03 04 Jun 20
Anthony Spencer was great!! Very quick response time!! He was very Professional! I would suggest him because he helped me find a affordable rate and explained all the technicalities..
Fre Hall
Fre Hall
16:38 28 May 20
I was referred to Bizinsure by a industry trade group that I am a member of. It was easy to get a quote online and then received excellent customer service from Bradley H. to complete my policy purchase over the phone. I have shared this company information now with other business owners for their policy needs.
Dawn Torres-Gale
Dawn Torres-Gale
22:11 08 May 20
This company was very precise with explaining services and made sure I chose the right business insurance coverage, great customer service at purchasing.
Nekeisha B.
Nekeisha B.
01:30 05 May 20
Amazing
Jasmine Q
Jasmine Q
14:31 02 Dec 19
Trish is the most patient, professional and understanding insurance agent I’ve ever worked with. Trish has taken care of all my business insurance needs for the last couple years. I am really happy that I found an insurance agent that I know will take care of me & all of my concerns. I feel like a valued customer & I appreciate the great customer service that I get every time!!THANK YOU!
Dr. Youssef C. Atallah
Dr. Youssef C. Atallah
17:21 14 Nov 18
Tricia helped me get insurance for my business. The task of obtaining a quote was really starting to frustrate me until I was referred to BizInsure through a different agency. Tricia got me a quote fast, and even took a down payment over the phone and issued the proof of insurance the same day. a+ service, would do it again in a heartbeat!! Thank you!!
Josh Mariscal
Josh Mariscal
18:07 22 Jun 18
BizInsure was a great find! I did not have to fill out applications, and Tricia was able to quote and bind business insurance for me within half an hour.
Allison Young
Allison Young
17:28 21 Jun 18
Started doing business again and needed a policy fast. Ramez was reasonable, helpful and the rates are OK. Buyer beware? Sure, for me it turned out OK this time. Worth a call.
Mark Wallace
Mark Wallace
23:42 13 Nov 17
Daniel Scott
Daniel Scott
15:15 27 Jun 17
Great customer service. I've been very inpressed with my dedicated representative that had helped me navegate my insurence needs. Thanks so much!
Graham Blair
Graham Blair
22:12 23 Jun 17

Popular Searches