No matter how carefully an agent may perform his or her job, real estate agents can still be subject to lawsuits. Even if those lawsuits are superficial or groundless, there will still be legal expenses to pay. Unfortunately, this is true regardless of who wins the case. Legal expenses can be hefty and can quickly put a financial burden on the agent.
Errors and omissions insurance (E&O) is a type of or real estate agent insurance that provides coverage for these professionals during certain claims of malpractice. This can help lessen – or even eliminate – the amount that an agent will have to pay for a claim related to negligence, omissions, or error on the professional’s part. According to HighlandRisk Insurance, E&O insurance is an important component of protecting against financial loss.
What Does E&O Not Cover?
E&O insurance does have exclusions when it comes to what it will cover. This means that the insurance will not cover specific happenings, such as any claim that results from illegal or dishonest actions by an agent. If an agent causes harm to another person or even death, typically those claims will not be covered either. Additionally, if an agent causes damage to someone else’s property, that would be considered an exclusion.
Chances are at some point you will have to deal with a lawsuit as a real estate agent. Make sure you are protected so you can rest easy.