/ BLOG

Why real estate agents need Errors and Omissions (E&O) insurance?

Jul 20, 2021 · 5 minutes to read

Real estate can offer highly satisfying employment and the rewards for successful estate agents are significant. Nevertheless, even the best agent can make a mistake and find themselves facing legal proceedings from a client who is unhappy that a deal has fallen through or who holds the agent responsible for some undisclosed defect in the property they have purchased. When this happens, you need to have professional liability insurance coverage in place in the form of Errors and Omissions (E&O) insurance.

Errors and Omissions insurance* can protect professional service providers from potentially devastating financial damages resulting from alleged negligence or error in the delivery of your services. In all real estate deals there will be many discussions and negotiations, and often your clients will be looking to you for guidance as to the best course of action for them. You may offer advice in good faith that might, which at some point further down the line, is proven to have been wrong, and this is where problems will arise. If you have Errors and Omissions insurance in place, your legal costs of defending any case brought against you, and the cost of any penalties imposed by the court should you lose, will be met by your insurers (subject to any deductibles and policy limits in place).

It would be nice to think that as a professional you will never make a mistake, but even the best estate agents, working in completely good faith, will make errors from time to time. An example might be that a buyer could be well advanced in discussions about purchasing a property before it is revealed that a lien is in place on the property, putting the whole sale in jeopardy. You could say that this is the seller’s problem and that they should have disclosed it to you, but the buyer may say that it was your job, as their agent and the agent promoting the sale of the property, to discover this for yourself. Should the client take legal action against you, Errors and Omissions insurance may cover your legal fees and any compensation imposed or agreed.

Another problem that can be covered by Errors and Omissions insurance is when your clients decide that you have not provided the services for which you were contracted or that you haven’t acted in their best interests. Sometimes a buyer might decide that you weren’t effective in agreeing on a good price for the property in question; they could decide to take action against you for the discrepancy between the agreed price and what they think was the right price. You could also find yourself facing legal action if there has been a miscommunication between yourself and the client, for example you might inform the client that the vendors will most likely meet the closing costs of a deal, but you’re waiting for confirmation; if later it turns out that the buyers have to pay 50% of the cost, they might sue you on the grounds that you led them to believe that this wouldn’t be the case.

Another area which could lead to clients taking out legal action against you is if they feel you have been indifferent or neglectful of their interests and have fallen below the general accepted standards of the real estate profession. Under this head you could be sued for omitting information, for example the costs of rectifying a structural problem of which you were not aware, for failing to supply your clients with all the paperwork they need, or failing to alert your clients to potential zoning issues with the property in question. In many instances you may feel that it is the seller’s negligence that is to blame in not informing you of these issues, but often the legal system will decide that the buck stops with you as the agent.

Real estate deals can be highly complex and there are numerous balls that have to be kept in the air all at the same time if you are going to keep every interested party satisfied with your work as an agent. It’s only human to occasionally take your eye off a particular ball, but the consequences of doing so can be severe or even ruinous for your business, career, and finances. If you have real estate agent Errors and Omissions insurance in place, you can protect yourself against the worst consequences of any errors that might occur in the course of your professional practice.

 

*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.

Get Free Online Quotes and get coverage instantly

The coverage you need for your business.

Business insurance is divided into different policies. We offer 4 types so it's easy to design the coverage that fits your business.

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Let's find

The coverage you need for your business

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Love it
Hanna R.
1708272180
Every year, BizInsure is my go to for general and professional liability insurance! Thenrates are unbeatable.
Calandra K.
1708044666
The agent was quick and efficient in generating a quote for my needs.
Theresa F.
1707895796
I enjoy working BizInsure they always answer all my questions and make sure i have the correct coverage for my business.
Prompt and professional service from Biz Insure. Thanks Leslie and Liza!
Bev G.
1707524454
Very easy to sign up for insurance.
Great company
Brown G.
1706896003
Fast and efficient!
Kim C.
1706746693
عالی
alireza J.
1706727364
It was great being able to get a policy that suits my company's need in less than 30 minutes. They were vey thorough. Very competitively priced.
Lynette C.
1706621476
I worked with Andrea for another start up business. She was very knowledgeable and help me pick the correct policy. Amazed at how quickly the process went.
Representative was very kind, helpful, and educated me well. I appreciated today's prompt service with confirmation that I was satisfied with what was provided to me.
Tina P.
1706224051
Great company for.your low cost business insurance needs.
constantin T.
1706156911
Staff was very fessional and friendly. I was able to get a quote and move forward within 20 minutes.
Pebbles S.
1706126428
Wonderful
Complete C.
1705788054
MUY BUENO
Super easy process.
Ashley G.
1704830227
It’s very easy to understand and at a very reasonable price.
Mary M.
1703780096
Professionalism, Quality, Responsive and budget friendly
B D
1703029371
Great rates, easy to understand and select appropriate coverage, can get in a jiffy
Brie C.
1702775397
I have been a customer of BizInsure for a few years now and I love it. There customer service is awesome and the prices are affordable.
Danyale W.
1702132165
Quick easy experience! The rep was knowledgeable & pleasant. Customer care was awesome to respond and clarify my concerns.
Kathy Ann A.
1702059151
bizinsurance makes purchasing Business Insurance...SIMPLE!
Andrea W.
1701380391
Great quality of Service ,faster and convenience way to pay at most. Thank you for your Service to my Healthcare Facility .
Quick and easy!!!!
Terry
1701319042
Great service! Easy process and very informative representative. Andrea was great and very patience with our process. I would recommend using them!!
Terrance R.
1700848536
Always and easy process. Thanks!
Gerald S.
1700244544
Renewal was quick and easy online
Angelita K.
1699752900
I had a great experience working with Andrea from BizInsure. She was extremely knowledgeable, helpful, and responsive throughout the entire process. She guided me through the different options available and helped me find the perfect home care professional liability insurance policy that suited my needs. Her professionalism and expertise made the entire experience smooth and hassle-free. I highly recommend working with Andrea and BizInsure for all your insurance needs.
Juliette S.
1699032636
Easy to submit an application and to get quotes
Simone S.
1698775217
I had the most pleasant prompt and professional experience of my life with Bizinsure. Everything was completed in record time, at an unbelievable cost…and my certificate of Insurance was promptly emailed to me. Most of all it was effective immediately. No hassle no back & forth, just great service highly recommend to all small businesses.
Marcia S.
1698407456
Excellent
advanced U.
1697824466
Great service. Very professional and cordial. Thanks
Jeremiah U.
1697064641
BizInure has been a great company for our insurance needs. I wish customers services was 24/7, that would make it a five stars
Novilette L. J.
1696828014
Easy to navigate what you need. Always notify ahead of renewal!
Athena T.
1696646371
js_loader
Google Rating
4.7
Based on 241 reviews
×
js_loader