Errors and Omissions Insurance for Real Estate Agents

Services for Real Estate Pros Insurance NPN # 13379201

Errors and Omissions, called E&O for short, is the name used to describe a type of malpractice insurance coverage for real estate professionals. The coverage protects against financial losses from lawsuits filed as a result of your work in the real estate profession.

No matter how carefully you do your job, you are at risk, even from lawsuits that may be unfounded or frivolous. Legal expenses must be paid no matter who wins in court, and those costs can be devastating to your finances. When you have Errors and Omissions coverage, the insurance company defends the claim and pays any settlement or judgment against you up to the limits of liability stated in the policy.        

Typical E&O Coverage                                                                       

 Pays claims that come about due to error, omission, or negligence in regard to your duties as a real estate agent Pays claims that are made during the policy period

Common E&O Exclusions                                                                                                                      

Claims resulting in dishonest or criminal acts by you Claims associated with polluted property Claims against you if you cause bodily harm or death to another person Claims arising from damage you cause to someone's property

E&O Liability Limits                                                                                                                                 

Varies depending on your policy. Ask the agent to explain your options.


The policy may have two deductibles, the amount of money you must pay before the insurance coverage kicks in. There might be one deductible for defense costs and another for payment of damages if you are found to be at fault.

Protecting Yourself                                                                                                                                        

  If someone files a lawsuit against you, chances are they will also file a complaint with your state real estate commission. Keep accurate records of all transactions. What did you talk about on the phone on Monday afternoon, May 5th? What was the buyer or seller's response when you asked if they wanted to purchase home warranty protection? Did a buyer decide not to do a home inspection against your recommendations? Write it down and put it in the file.

It's not uncommon to ask your buyer or seller to sign a statement that you recommended a specific action. The buyer who didn't want a home inspection may come knocking at your door if the air conditioning doesn't work the day he or she moves in. If your files contain the signed waiver, it's not your problem.

Document as many facts as possible during your real estate transactions. It could help you later if your client becomes unhappy about some aspect of the sale.

call 800-559-8148 for more information or visit

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Comments (6)

Indera Coggins
Re/Max 100 - Dunkirk, MD

Wow. Frank thanks for the information. Sometimes we just don't take the time to read the important stuff. I had no idea and happy that you post this blog.

Oct 29, 2010 02:37 AM
Kim Boekholder Utah Real Estate
Results Real Estate 801.580.5624 - Draper, UT
Broker, Results Real Estate

I always wondered about the E&O insurance I was paying and what it covered.  It was on my to-do list of research while I decide if I need to go on my own or stay under the umbrella of a big company

Oct 29, 2010 02:39 AM
David Cole
David Cole CPA - Orlando, FL
David Cole CPA

Very important & good information to sharing this, thanks & have a great day

Apr 24, 2012 09:04 PM
Insurance Solutions Unlimited,LLC
Insurance Solutions Unlimited, LLC - Winter Haven, FL
Insurance Solutions Unlimited,LLC

Important information for all to read. good post! Thank you for sharing

Apr 24, 2012 09:11 PM
Insurance Solutions
Insurance Solutions Unlimited, LLC - West Palm Beach, FL

Important information for all to read. good post! Thank you for sharing

Apr 26, 2012 09:08 PM
Sabrina Schirmer
National Insurance Solutions, LLC - Winter Haven, FL

E&O Insurance is important for all professionals, be sure to look at your policy to see what is excluded from coverage

like claims "claims from negotiating short sales"

Jul 07, 2012 09:38 PM