Errors & Omissions
Professional

liability

limited coverage . . . for conduct undertaken in performing or rendering professional acts or services.
Real Estate Agents & Brokers

No longer a happy home...

Real estate agents and brokers like to sell homes to happy people. And almost all buyers are happy, for a little while. But what happens a few months later when a buyers basement floods or the septic tank overflows?

Maybe the buyer recalls a conversation where he thought the real estate agent said, “This basement is coated to prevent leaks.” Or, “this home is on public sewer.” The now unhappy buyer may decide to bring a lawsuit against the agent and broker for misrepresentation.

A real estate errors & omissions policy (professional liability insurance) pays to defend the agent and broker against such claims. The insurance company uses one of its specialized lawyers to protect the real estate agent. In addition to hiring and paying the defense team, the insurance company will be responsible for any claims up to the policy limit in the event that judgement is brought against the real estate agent or broker.

As an agent, you should inquire if your broker has errors & Omissions coverage and are you protected by the broker policy.

Real Estate Agent / Broker

Example: A prospective purchaser sued a real estate broker when the transaction failed due to close at the last minute due to difficulties associated with their purchase financing. The purchaser ended up losing the non-refundable deposit for failure to close. The key allegations against the broker were for misrepresentation of the availability of deposit funds prior to the money going into escrow.

Example: A real estate broker handled a commercial property transaction for a client. The commercial property was directly related to a business venture the client was entering into, and that business venture ultimately failed. The client sued the broker alleging that the transaction caused the client's business failure. The client alleged that the broker misrepresented the condition of the property, which was directly led to the business failure at the property.

Example: A real estate agent assisted in the purchase of a home. After closing, the purchasers discovered structural defects and deficiencies in the condition of the property. Unable to locate the sellers, they turned to their real estate agent. The purchasers claimed that the agent breached his/her duty to conduct a reasonably competent and diligent visual inspection, failed to disclose these deficiencies and conditions, was negligent in performing his/her duties and made misrepresentations as to the condition of the property.

Apply for the Real Estate Errors & Omissions Product Application here.

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