Understanding the types of insurance coverage available today is important for any professional who works in a field with a high degree of risk or large financial assets. For people working in real estate, errors and omission insurance, or real estate E&O insurance, is often viewed as an essential kind of coverage. This insurance offers a degree of protection against the charges of negligence or professional failings that many professionals will face over the course of their careers.
The Basics of E&O Insurance
Errors and omissions insurance provides for the cost of legal defense against charges of professional negligence and the cost of any damages that are awarded. E&O can cover charges stemming from accidents on the part of the professional, including mistakes or inadvertent admissions. An E&O policy will also protect professionals against the costs of groundless charges made by clients.
Do Real Estate Professionals Need Additional Coverage?
The needs of each agent and firm can vary, which is why speaking to an insurance agent about any policy decisions is best. Some real estate E&O insurance policies offer more extensive coverage than others; for instance, some policies may cover claims made before the policy began, and others may cover issues that originated during coverage but were discovered afterward.
A good real estate E&O policy can often provide sufficient coverage for firms and brokers. However, real estate professionals who are in doubt should speak to a professional about the terms of their current policy, potential gaps in coverage, and any complementary policies that could further reduce financial risk.