Real Estate E&O Insurance
Errors and Omissions Insurance for Real Estate Professionals

Real estate agents, title agents, and property managers are used to facing challenges. Between fluctuating markets and discerning clients, it takes persistence and hard work to build a successful real estate business. But there are some circumstances that no amount of tenacity can eradicate. There are some litigious folks whose reactions you have no way of controlling. So if you ever make an oversight in your work, the client who suffered a loss due to that slip could sue your business.

To address claims of professional negligence or errors, most real estate and title agents turn to their Errors and Omissions Insurance (aka Professional Liability Insurance). That way when communication breaks down or a client does not want to work through the problem any other way but through the court, your agency can survive the costly legal fees. From hiring an attorney to paying settlements, your policy will protect your business from draining its assets because of a mistake.

Keep reading to learn how E&O coverage protects your business and allows you the security you need to keep growing.

E&O Protects

E&O Insurance: Protecting Real Estate and Title Professionals

Professional Liability or Errors & Omissions Insurance kicks in when someone alleges the services you delivered or the way you carried out your work was faulty, negligent, or incomplete. Say, for example, a client alleges you didn't disclose all the information about the property they purchased, and had they known the full history of the house, they would not have bought it. They could pursue your company for professional negligence — that is, they claim you were liable for shoddy, incomplete, or incorrect work; mistakes or oversights; or that your business failed to perform professional duties.

If such a scenario arises, your Professional Liability policy covers the cost of hiring a defense attorney and related court fees. If your business is found guilty of wrongdoing, the policy also pays for the requisite settlement or judgment expenses. In the event of a meritless claim, your coverage still protects you from the financial burden of paying attorney's fees and court expenses.

Real Estate Errors and Omissions Insurance is considered a must-have policy for professionals who deal with clients — especially when you are involved with one of the heftiest investments your clients will ever make. Most of the time, Professional Liability lawsuits are more a reflection of a person's disappointment in the outcome of a venture than they are a reflection of your work.

The times when your real estate or title agency is at fault, the insurance makes sure your business can survive the costly litigation process. However, you will need to make sure your policy is in force well before it ever comes time to file a claim and that it was in force during the incident. Most Errors & Omissions policies are "claims-made" based, which means your coverage won't kick in unless your claim happened while the policy was active and the same policy is still active when you file.

These clauses are worth noting because different states have varying statutes of limitations, meaning you could be sued for deals you closed months ago. Most real estate and title businesses choose to carry the same Professional Liability / Errors & Omissions policy throughout the life of their company to make sure they have access to this coverage any time they need it.

E&O: Key Details

Real Estate Errors and Omissions Insurance: Key Details

If your real estate or title business is on the market for a Professional Liability policy and you have questions, know that our Real Estate Specialist insurance agents are happy to help. Here are some key details that may help answer your questions as well.

Claims-Made Coverage: What It Means for Your Real Estate Business

Professional Liability policies today generally offer "claims-made" coverage. Claims-made coverage is based on two simple caveats:

  1. When the alleged incident occurred, your policy must be active.
  2. When you file your claim, your policy must also be active.

Unless your claim meets both conditions, your event will not be covered by the policy. This is why many real estate and title businesses opt to carry their same Professional Liability policy as long as their business is alive.

If you already have an Errors & Omissions policy, but you want to change carriers, you might want to purchase a "tail" policy while your business transitions between providers. If you don't have interim coverage for this period, any lawsuits filed against your business once your policy is terminated will not be covered.

Tails and Prior Acts for Coverage Gaps

If you want to change your Errors & Omissions policy in favor of a new one, your real estate or title business will not be able to file claims until your new policy kicks in. When your new policy is in force, however, it may not account for any events that occurred before its activation. To address both these issues, you may want to purchase "tail" coverage for the interim between your old and new policies and "prior acts" coverage for events that happened before your new policy began. Both of these coverages are designed to fill potential gaps in your business protection.

With tail coverage, your business can file claims during the transition period between the termination of your old policy and the activation of your new E&O policy. Prior acts coverage gives your business the flexibility to file a claim for events that happened but were not reported before you new policy came into effect. If you want to learn more about these options, talk to your insureon agent.

E&O Designed for Your Business

Errors and Omissions Insurance Designed for Your Business

When you're ready to protect your business from the high cost of professional errors, we can customize your Professional Liability plan based on the employees you need covered and professional responsibilities that expose your business to risks.

Ready to get going? Complete our easy online application today. Depending on your needs, we can send you a competitive quote in minutes!

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