Real estate agents face a variety of risks in their daily operations, especially those that wear multiple hats as a way of staying competitive in the industry. As agents adapt to meet the needs of their community and add to their repertoire with services such as property preservation or management, title closing and property appraisals, they are also adding to their long list of liabilities. Even the most knowledgeable agent can make a mistake that could potentially devastate them financially, so it’s crucial to stress the value of Errors and Omissions (E&O) Insurance for real estate agents.
When real estate agents protect themselves financially with the right E&O insurance policy, they can rest assured that they don’t have to face the hefty financial consequences of an E&O-related lawsuit on their own. E&O Coverage can protect against a wide variety of errors or omissions made by real estate agents. Here is just a sampling of some of the situations in which an E&O policy can provide monetary coverage for real estate agents facing a lawsuit.
Failure to Advise
Failure to advise or disclose specific information to a buyer can result in a claim against the agent. Even if the agent wasn’t aware of the information, they would need to provide the proof in court. However, their E&O coverage would assist in their defense fees, so while the burden of proof would fall on them, the legal cost would not.
Failure to Maintain Property
Sometimes real estate agents double as property managers for their clients, and with that added service they take on a lot more responsibility for a property. A mistake such as failing to maintain property as contracted or failing to properly secure premises can result in a costly lawsuit. However, this extra risk can be mitigated through the right E&O policy.
Transaction Errors
Transaction errors in real estate dealings are not unheard of, and sometimes they result in a sale falling through. Even if the error is not fault of the agent, an upset client may still want to file a claim against them.
Wrongful Eviction
Eviction can be a complicated process, and is another risk taken on by real estate agents who are offering property manager services to their clients. Often, a tenant that is facing an eviction will use any means necessary to stay on the premises. This means that the agent must be meticulous throughout the entire process, because any misstep could result in a claim against the agent.
About PL Risk
In addition to bringing you the latest news from the insurance industry, PL Risk provides Resources for Agents and Brokers nationwide. We’ve recently implemented Hiscox Now, which allows agents their own access to Hiscox and instant quoting. To learn more about our operations, contact us today at (855) 403-5982.
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