Real estate professionals’ clients rely on their services for their expertise and accuracy. Before entering into an expensive real estate transaction, clients seek out these professionals’ input for authoritative guidance and due diligence. However, it’s possible for even the most skilled and knowledgeable professionals to make a mistake that can have serious ramifications for a client. It’s extremely important that people who are working in the real estate industry have the resources to handle the aftermath of a costly error or omission.
Who Needs Errors and Omissions Insurance?
A wide range of professionals need the protections offered by real estate E&O insurance. For example, property managers, real estate agents and brokers, and mortgage bankers need policies that will protect them in the event of an allegation that an error or omission caused a client to experience damages.
What Types of Situations Can E&O Insurance Address?
In general, an E&O policy can address situations in which a miscommunication, misinterpretation, or failure to take corrective action has negatively affected a client who is owed a fiduciary duty of care. For example, a problem with a property’s title or the transfer of ownership can have costly repercussions. Likewise, a problem involving how commercial or residential real estate is managed could potentially result in substantial financial losses or physical damage to a property.