Mistakes happen. Even if you’re the best real estate agent in your area, chances are that someday you’ll make a mistake. The problem is that a mistake can be costly; if you’re found to be at fault, a lawsuit can bankrupt you. Even if a claim against you is found to be groundless, the cost of defending yourself can run into the thousands or tens of thousands. With this in mind, you should consider protecting yourself with errors and omissions insurance.
What Is Errors and Omissions Insurance?
Put simply, errors and omissions insurance for real estate agents is like malpractice insurance for doctors. It covers you, or your company, in the event that you’re sued for providing a service that was negligent or incomplete, or for not providing that service at all. Examples of these kinds of claims include:
- Failure to note problems with the foundation, roof, septic system, etc.
- Failure to note damage from termites or other pests
- Failure to detect soil or water pollution
- Breach of confidentiality
- Incorrect appraisal
Errors and omissions insurance is designed to cover defense costs, judgments, and settlements (though bear in mind that it does not cover intentional misrepresentation and fraud). However, policies will vary between companies, so look into errors and omissions insurance for real estate agents and make sure you’re getting the protection you need.