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What is Real Estate Errors & Omissions Insurance?
The increasing complexities of real estate transactions and the rising use of litigation have prompted a need for errors and omissions (E&O) insurance to reduce the risk to real estate agents, brokers, and the firms they represent against the potential of a lawsuit. In most cases this coverage protects real estate agents and brokers, however it can be extended to cover landlords and other classifications. Similar to all standard E&O policies, a Real Estate E&O policy protects the insured against any mistakes due to negligence or breach of contract made while doing business. The coverages are tailored for this specific line of work.

Why Have Real Estate Errors & Omissions Insurance?
A Real Estate E&O policy can cover costs for legal defense as well as settlements for negligence and breach of contract. Hiring a lawyer or reaching a settlement out of court can cost a business a significant amount of money. Many small agencies do not have the ability to pay for these costs out of pocket. Even proving non-negligence in court can have large costs.

• Lawsuits are unpredictable as clients can sue agents for failing to disclose issues that the agent himself may not have been aware of
• The most common real estate lawsuits stem from breach of contract, negligence, and misrepresentation
• The average cost for a real estate lawsuit is over $44,000

Coverage May Include:
• Environmental Pollutants coverage
• Full Prior Acts coverage available
• Defense outside the limit
• Duty to defend
• Internet coverage provided

• Optional Package policy:
• Errors & omissions
• General liability
• Business personal property

Sample Claim:
Realty Discrimination
A minority couple was relocating and used a real estate agent who they discovered on the Internet. The clients flew into the area to take a look at homes and discovered that they were only being shown homes in areas predominately inhabited by minorities. When they asked if these were the only homes available that fit their criteria and price range, the realtor stated that these were the only properties available. Upset by this, the couple retained the services of another realtor. They discovered that there were many other properties available and sued the original realtor for discrimination.

Target Classes
• Abstractors
• Auctioneers
• Mortgage Brokers
• Property Managers
• Real Estate Appraisers
• Real Estate Agents
• Residential and commercial risks
• Title Search
• Franchise and non-franchise real estate

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