The devil is in the details – a phrase that real estate agents know very well.
All the specific minutia that they have to manage – the various clients that they have to deal with, and the numerous properties that they have be knowledgeable on – it’s understandable that sometimes small details slip through the cracks. Because of this, real estate agents are particularly vulnerable when it comes to getting sued.
Even the smallest mistake could end up costing an agent a lot of money, or what’s worse is loss of business and solid reputation. That is why many states are now requiring agents to carry Real Estate Agent Errors and Omissions (E&O) Coverage. As a comparison, doctors carry medical malpractice insurance to protect them in case a patient sues them – it is a smart move for real estate agents to also protect themselves against disgruntled buyers. Below is a list of the top 3 reasons you and your business need Real Estate Agent E&O Coverage.
No One Wants To Be Sued
When a client purchases a home, it is a huge investment. When something is wrong with that investment, they need someone to blame, and their real estate agent is on the front lines. More and more clients are turning to the courts to hash out lengthy issues regarding negligence, breach of duty or property damage.
Spend a Little, Save a Lot
If an agent is covered, the insurer assumes the bulk of the legal costs which can be upwards of $1 million or more. Premiums are only a small annoyance when considering the amount of money that you could be forced to spend in a long, drawn out court battle.
It Might Be Required
Many clients specifically look for their real estate professionals to carry E&O insurance. By not carrying insurance, you may risk losing a client. In addition, is that many states are not requiring real estate agents licensed in their state to have E&O insurance. Check with your local realtor’s association for information on laws in your state.
Knowledge is power, and knowing your risks will help you better avoid them in the future. To learn if your coverage will protect you in every situation, download our list of Most Common Claims Against Real Estate Agents.