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What Is Errors and Omissions Insurance in Real Estate?
Errors and omissions insurance (E&O coverage), also known as professional liability insurance, can help protect your business if you make mistakes or errors in your professional services.So, if a real estate agent at your company misrepresents a property and you’re sued, this coverage can help pay your legal fees. Learn more about errors and omissions insurance and whether you should add it to your Business Owner’s Policy (BOP).
What Does Real Estate Errors and Omissions Cover?
As a real estate professional, your clients trust you to give them accurate advice about homes. This means if you miss an important detail, it can cost them money and result in them suing you.Your errors and omissions insurance can help cover claims of:
- Negligence
- Misrepresentation
- Inaccurate advice
E&O coverage can help pay expenses from a lawsuit, like:
- Attorney fees
- Court costs
- Administrative costs
- Settlements and judgments
You can also increase your E&O coverage beyond your policy term if you buy an extended reporting period or ERP for your policy.
What Is Not Covered by Real Estate E&O Insurance?
Getting the right insurance, like E&O coverage, is an important part of risk management for every company. But it’s important to note that errors and omissions insurance doesn’t cover every liability. For instance, you’ll likely need additional real estate insurance policies, like:
- General liability insurance, which helps protect your business from bodily injury, property damage and slander claims.
- Workers’ compensation insurance to help give your employees benefits if they have a work-related injury or illness.
- Commercial auto insurance, which helps pay for car accidents if you or your employee are at-fault while driving a company vehicle.
- Data breach insurance, also sometimes called cyber liability insurance, to help you respond to and recover from cyber-attacks like data breaches.
Real Estate Errors and Omissions Claims Examples
Some examples of claims that errors and omissions insurance would help cover for real estate professionals include, your:
- Company hosting an open house for a client without 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.
Who Needs Real Estate E&O Insurance?
Errors and omissions insurance is an important coverage for many businesses and professionals throughout the real estate industry, including appraisers, agents and brokers.It’s also important to note that state business insurance requirements vary. For example, Tennessee law requires all active real estate licensees to carry E&O insurance. However, California doesn’t require it.
How Much Is E and O insurance for Real Estate?
The cost of errors and omissions insurance for real estate businesses will depend on different factors, like your:
- Limits of liability coverage
- Claims history
- Location
- Risk
Get a Quote for E&O Insurance in Real Estate
We’ve been protecting real estate professionals for over 200 years. You can count on us to help you get the coverage you need. To learn more, get a quote online for free today.This article provides general information, and should not be construed as specific legal, HR, financial, insurance, tax or accounting advice. As with all matters of a legal or human resources nature, you should consult with your own legal counsel and human resources professionals. The Hartford shall not be liable for any direct, indirect, special, consequential, incidental, punitive or exemplary damages in connection with the use by you or anyone of the information provided herein.