Real estate errors and omissions insurance is essential for large firms. It protects against lawsuits, angry customers, and mistakes made by employees. Even when claims against an agency are groundless, legal fees used to fight the lawsuit can be expensive, which is where errors and omissions coverage comes in. There are a number of ways to get comprehensive yet affordable errors and omissions insurance.
The cost of real estate errors and omissions insurance can vary depending on the real estate agency. Location, size, and income can all be factors, as well as claims history. Has a company had many claims before? If not, have they company just been lucky, or have they actively taken steps to avoid lawsuits?
There are a number of steps that can be taken to mitigate claims. First of all, companies should always have written contracts that spell out the obligations and costs to each party. Also, communication between client and agency should be consistent, so that expectations are clearly set. Finally, it’s best for businesses to keep accurate records with specific details, such as whether or not the buyer was aware of a certain problem in advance. Some agencies have buyers sign a statement certifying that an agent made a certain recommendation.
Taking these steps can help businesses stave off lawsuits, both by expediting settlements and avoiding groundless claims. Better still, they can reduce the cost of real estate errors and omissions insurance—while thoroughly protecting the agency.