Get Real with Real Estate E&O. Product Highlights and Claims Examples.

*Reprinted from my blog at http://blog.myinsurancenerd.com

Just like independent insurance agents, real estate agents need errors and omissions insurance.

Check out these features for Real Estate Agents E&O

• Bodily Injury and Property Damage resulting from a covered professional service(s).
• Disciplinary proceeding defense expenses reimbursement up to $25,000.
• Increased liability limits available for those who qualify.
• Defense expenses related to covered claims in additional to the limits of coverage.
• Deductible applies to defense expenses, unless endorsed or not allowed by state.
• Option to provide prior acts coverage without a retroactive date limitation, for those who qualify.
• Many extended reporting period options, including an unlimited time period endorsement option.
• No exclusion for fair-housing discrimination committed in real estate professional services as a real estate agent or broker.
• No exclusion for losses resulting from a real estate agent or broker failing to advise a buyer or seller that pollution, fungi and bacteria exists on a property.
• No sub-limits for certain types of claims.
• Coverage for employees and independent contractors of the insured automatically included as protected persons for claims resulting from professional services they perform for the named insured.

Claim Examples

Bodily Injury and Property Damage Coverage

While holding an open house, a guest trips and falls sustaining a back injury. As the injury results in surgery and the guest cannot return to work, he brings a claim against both the homeowner and you, alleging improper lighting and failure to warn. Real Estate Professionals Policy provides liability coverage for any negligence of the insured, the broker, and/or your agent, up to the full limits of the policy, less any deductible, in your capacity as a real estate agent or broker.

Pollution, Fungi, Bacteria

You were the seller’s agent. Prior to the sale of the property, you received a call from a neighbor complaining that a waste dump on the subject property was damaging their property. Although you provided this information to the buyer’s agent, the buyer alleges they never received this information prior to closing. The buyer brings a claim against you for failing to advise them of the waste dump. Real Estate Professionals Policy provides coverage for failing to advise of the existence of pollutants, fungi, or bacteria in your capacity as a real estate agent or broker.

Pre-Claim Assistance

Your listing agent made a $5,000 error in the Estimated Proceeds Worksheet given to the seller. Although the error was only in the estimate given to the seller, the seller is convinced he’s loosing money and threatens to back out unless the buyer agrees to a $5,000 increase in the purchase price. The buyer has already sold their existing home and faces additional living expenses if the transaction fails to close on time. Both sides retain counsel who maintain that their position is legally correct. You notify us of the situation and request assistance. We can assist you, including retaining experienced local defense counsel to assist you if need be. The costs and fees incurred at the direction of the claims department are covered under your Real Estate Professionals Policy, and your deductible is not implicated nor are the coverage limits affected for any dollars spent on this pre-claim assistance.

Automatic Acquisitions Coverage

You purchase another real estate agency, acquiring some of their employees and independent contractor agents. During the busy acquisition process, you forget to timely advise your insurance agent of the acquisition. During this time, one of the newly acquired agents represents a buyer in the purchase of property. 70 days after the acquisition, and before the ending date of the policy year, you receive a letter from the buyer alleging that the agent failed to advise them of the need to obtain a separate septic inspection which would have discovered temporary repairs to the septic. The buyer alleges he is unable to occupy the property as the property is too small to accommodate replacement of the septic system. Your Real Estate Professionals Policy provides coverage for this claim as coverage is automatically provided for 90 days after acquisition, or the ending date of the policy, whichever is earlier.

*These are examples of claims and how most policies would respond to the claim. We work with you to give you the coverage and rates you want at the lowest rate possible.