Real estate agents provide an important service to homebuyers and sellers alike. They help those who are unfamiliar with the ins and outs of real estate transactions to become first-time homeowners; they assist those who are looking to upgrade to their dream houses, and so much more. Unfortunately, as with any professional position, working in this field is not without its risks. Real estate agents can be sued for a number of reasons, so it is important that they protect their financial interests with real estate errors and omissions insurance. An independent insurance agent in the Trusted Choice® network can help you find the right coverage so that you're protected in case of a lawsuit.
Errors and omissions insurance covers all kinds of professionals against lawsuits stemming from professional errors that cost others money, result in injuries other than bodily injuries or hurt a business. If a third-party faces damages because of something that this professional was supposed to do but didn’t or because of something the professional did but shouldn’t have, errors and omissions insurance provides coverage.
This is similar to a general liability insurance policy but differs in that it covers damages caused by professional missteps rather than resulting in bodily injuries or property damage. If you are an employee of a real estate agency, they may require you to purchase this coverage or they may cover you under their master policy. If you are an independent contractor, this coverage is not required, but it is highly recommended, as it can spare you from large financial losses and legal trouble.
Insurance companies have designed a number of different kinds of errors and omissions policies, each geared toward a different profession. For example, medical malpractice insurance is a type of errors and omissions insurance made specifically for doctors. As a real estate agent, you want to look for a real estate errors and omissions policy.
People can sue real estate agents for just about anything, regardless of whether the agent is actually at fault. Real estate errors and omissions insurance covers your legal defense, which can be quite costly, as well as other related expenses and damages. Some situations this insurance can cover include the following:
Bear in mind that this coverage is claims-based, meaning that the insurance company you have in the year that a lawsuit is brought against you is the company that pays. Therefore, if you get sued for a mistake you made two years ago, but have since changed insurance companies, your current company will cover you.
Most policies offer extended reporting periods so that you can remain covered for a sufficient period of time after you retire or stop working in the real estate industry. Be sure to discuss extended reporting periods with your Trusted Choice agent because this is not a standard type of coverage and it is often misunderstood by consumers.
When you are ready to purchase an errors and omissions insurance policy, be sure to ask a local independent agent in the Trusted Choice network for assistance. These agents can help you understand the various aspects of your coverage options as well as obtain a variety of quotes from competing insurance companies. Find a local Trusted Choice agent to learn more, and start comparing real estate errors and omissions insurance quotes.