When a client feels as if you’ve made a professional mistake, they are likely to file a lawsuit against your company. Errors and omissions insurance, or E & O, is a common name for real estate agents professional liability coverage. This insurance is meant to help protect you from the severe financial consequences that can arise from lawsuits and legal actions, even when you’re not at fault.
For example, a customer may hire your real estate services to help them purchase a rental home as an investment property. Later they may file a lawsuit against you, claiming that you neglected to fully inform them of repairs that will be needed on the property. They feel that you made a mistake which will cost them dearly in both time and money. Even if you did not make any mistakes unfortunately, you will still have to spend your own time and money addressing these legal claims. Unless you are protected with real estate agents professional liability insurance.
Depending upon the details of your real estate agents professional liability policy, this insurance protection can pay for the cost of your litigation expenses. It can also pay for your income losses that are incurred when you must spend time responding to the legal claims. When applicable, your E&O policy can also pay your client’s damages, losses or other settlements and awards.