Real Estate E&O Insurance

Real estate E&O insurance protects agents and brokers from lawsuits due to professional mistakes like misrepresentation, paperwork errors, or failure to disclose property issues. It covers legal defense costs, settlements, and judgments, helping professionals safeguard their business and reputation.

What Is Real Estate E&O Insurance?

Errors and Omissions (E&O) insurance, also called professional liability insurance, is designed specifically to cover real estate agents and brokers against claims of negligence or mistakes in their professional services. Unlike general liability insurance, which covers physical injuries or property damage, E&O focuses on financial losses caused by errors in professional judgment.

Why Real Estate Professionals Need E&O Insurance

The real estate industry is high-stakes: transactions involve large sums of money and life-changing decisions. Even a small oversight can lead to significant financial loss for a client. Common risks include:

• Misrepresentation of property features or value

• Failure to disclose defects or zoning issues

• Errors in contracts or closing documents

• Negligence in providing professional advice

Without E&O coverage, defending such claims can cost thousands—even if you are not at fault.

What Does E&O Insurance Cover?

Typical coverage includes:

• Attorney fees and court costs

• Settlements and judgments

• Claims of negligence, errors, or omissions

• Misleading or incomplete property information

What it does not cover:

• Intentional fraud or criminal acts

• General liability risks (slip-and-fall, property damage)

• Bodily injury claims

How Much Does Real Estate E&O Insurance Cost?

Premiums vary based on factors like firm size, location, and claims history. On average, individual real estate agents pay between $500 and $1,000 annually, while brokerages may pay several thousand dollars depending on coverage limits and number of agents.

Benefits of Real Estate E&O Insurance

• Financial protection against lawsuits

• Peace of mind for both agents and clients

• Compliance – some states and brokerages require E&O coverage

• Reputation safeguard – showing clients you operate professionally

FAQs About Real Estate E&O Insurance

1. Is E&O insurance mandatory for real estate agents?
In some states, yes. Even when not required, most brokerages recommend or require agents to carry coverage.

2. Does E&O insurance cover lawsuits if I didn’t make a mistake?
Yes. It pays for defense costs even if the claim is groundless.

3. Is E&O the same as professional liability insurance?
Yes, but in real estate, the term “E&O” is more commonly used to describe professional liability coverage.

4. Can a claim exceed my policy limit?
Yes. That’s why it’s important to choose appropriate coverage limits (commonly $1M per claim).

Real estate E&O insurance is not just an optional extra—it’s essential protection for agents and brokers handling high-value transactions. One claim could wipe out years of earnings, but the right E&O policy shields your business, your finances, and your reputation.

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