TL;DR: Real estate errors and omissions (E&O) insurance protects professionals from costly lawsuits resulting from professional mistakes or oversights. It’s essential for agents, brokers, and others handling complex transactions.
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Protects against lawsuits from professional mistakes
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Covers legal fees, settlements, and related costs
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Common claims: missed deadlines, errors, misleading info
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Doesn’t cover fraud or property damage
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Essential for agents, brokers, managers, and consultants
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Cost varies by location, experience, and coverage
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Choose flexible, tailored policies
Real estate E&O insurance protects your business when mistakes happen. Whether it’s a missed disclosure or paperwork error, one oversight can cost thousands. This coverage helps shield agents and brokers from lawsuits tied to professional services.
What Does Errors and Omissions Insurance Cover?
Wondering what does errors and omissions insurance cover? It covers claims from mistakes, oversights, or missed deadlines. If a client believes your work caused them financial harm, this policy helps pay legal fees, settlements, and other costs.
Remember, realtors must follow the code of ethics outlined by the NAR. If you breach that, intentionally or not, clients could sue you.
Typical E&O coverage includes:
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Errors in contracts or listings
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Misleading statements
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Missed deadlines or forgotten details
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Failure to deliver promised services
It won’t cover fraud, criminal acts, or property damage. Always read your real estate E&O insurance policy closely.
Who Needs Errors and Omissions Insurance?
Anyone who provides professional services or advice where a mistake could lead to financial loss may need error and omissions insurance. These roles involve complex transactions, legal documents, and client trust. One oversight, intentional or not, can trigger a lawsuit.
In real estate, these professionals need errors and omissions insurance:
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Real estate agents
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Brokers
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Property managers
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Appraisers
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Leasing agents
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Transaction coordinators
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Real estate consultants
How Much E&O Insurance Do I Need?
Unsure of how much E&O insurance you need? The amount depends on your business scale and risk level. You should consider:
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Number of deals you close per year
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Property values
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Client types
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State laws and brokerage rules
How Much Is E&O Insurance for Realtors?
You can lower your premium by maintaining a clean record, bundling policies, or taking risk management courses.
Factors that impact E&O insurance cost for realtors include:
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Where you work
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Size of your business
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Your experience
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Claim history
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The amount of coverage you choose
For an estimate of how much E&O insurance costs for realtors, you should contact your trusted insurance agent. A professional can help you find a policy that covers what your need and help you compare prices.
How to Get Errors and Omissions Insurance for Real Estate
Getting errors and omissions insurance starts with researching providers. Choose one that specializes in real estate coverage. Reach out to your local insurance agents to see what requirements your business might need. They can advise you on what are the best real estate E&O insurance policies for you.
They may need documentation from you like:
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Real estate license
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Business details
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Past claims
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Annual income or sales volume
Choosing the Right Policy
Find a policy that fits your work and risk level. Check coverage limits, exclusions, and deductible options. Look for policies that offer flexibility as your business grows. Consider retroactive and tail coverage if you’ve switched firms or plan to leave the industry.
Learn more about errors and omissions insurance here.
This post is for informational purposes. The details and conditions of insurance policies vary. We always recommend speaking with an agent to understand the terms of your existing policies and the policies you plan to purchase.
To consult with an insurance advisor, call 800-392-6532 or email insure@colby-group.com.
