All real estate salespersons are familiar with the infamous Error & Omission Insurance (E&O). Some real estate brokerages charge us for the benefit of having this insurance than is very important to have in this litigious world we live in.
How many real estate agents have actually visually saw this policy that their broker is supposed to have to protect you in the case of a lawsuit for an actual error or omission?
I can personally tell you from bad experiences in the past that some brokers elect not to pay for this insurance as they rather spend the money on other things.
Where does this leave the agent? Especially when you’re paying for it.
Each sales agent should be able to obtain their own insurance but this is not the case in the industry so agents be careful who you work for and it might be best to demand to see a copy of the insurance from your broker.
Court decisions have exposed real estate brokers and sales professionals to enormous liabilities. The importance of having this is obvious. The insurance covers liabilities for mistakes, errors and negligence in the listing and selling activities of a real estate office.
It should be noted that E&O does not cover punitive damages awarded by the courts for malicious actions.
Brokers can be held liable to improperly qualifying a buyer or tenant, not disclosing an offer, representing that a property is safe, not making a reasonable effort to sell a listed property, failure to reveal a material defect, etc.
Please contact a specialist to discuss your options when you are starting your own brokerage or discuss with your broker.
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