Even if you have general commercial liability insurance for your real estate agency, you should consider specialty insurance for real estate agents, such as errors and omissions (E&O) insurance. This type of policy covers your legal fees and any potential settlement if a mistake or omission occur during a real estate transaction.
No matter how careful you are, mistakes can happen especially if your agency is busy and handles a lot of sales. You will have to defend yourself, which is very costly and time consuming. An E&O policy assumes the cost of your defense. Even if you are found not at fault, the legal fees could cripple your business. Errors and omission claims with real estate agents are most often related to:
- Failing to recommend a reasonable price
- Not inspecting the property
- Not disclosing material facts about the property
- Delays in the transaction time
- Not providing documentation or reports
Some people believe that carrying insurance makes you a bigger target, but the reality is that people will sue you whether or not you have insurance for real estate agents. Whether you are a seasoned agent with years of experience or just starting out, E&O insurance protects you. Don’t risk your reputation and finances by not having adequate coverage when you need it. Talk to your insurance specialist about your risks and find the right policy that gives you peace of mind.