E&O: Errors & Omissions

Real Estate Agents & Brokers

Overview

Real estate agents & brokers are the intermediaries that make the real estate market go. Most common are agents that assist in the purchase and sale of residential real estate, but some are involved in leasing and the sale of various types of commercial property.

Mercator Risk Services provides professional liability for all types of real estate agents and brokers in the US. Because of our unique specialization in this area, Mercator can assist you in providing the best coverage at highly competitive rates for your real estate account.

Exposure

Real estate agents and brokers have professional liability claims, although both the frequency and severity are typically low. Real estate agents and brokers claims are often triggered when a buyer of a property finds problems that were not disclosed, or a seller finds that the value received was not fair. In either of these situations the real estate agent/broker may be a visible deep pocket even though he or she is not at fault. The amounts at stake can be significant enough to cause a claim, the claims are often driven by emotion as much as value, and the resulting litigation can be long and expensive.

A real estate agent/broker claim or lawsuit may not involve a clear error or omission, and claims with no clear error can lead to litigation. For example, a client may not get the value he or she expected from a sale and may bring a claim to obtain compensation for the perceived loss of value. These claims are often as difficult and expensive to defend as a clear-cut error. Since professional liability insurance typically pays for the cost of defending a claim, professional liability insurance is important to protect the financial assets of a real estate agent/broker from frivolous claims as well as providing protection from errors.

Professional Liability Insurance

Real estate agents and brokers professional liability insurance, sometimes called errors and omissions or E&O insurance, is available from Mercator Risk Services. Coverage and pricing vary depending upon the type of professional operation, the specific services provided and the account's size and location. The percentage of commercial property and the location can have a significant impact on pricing.

Specific coverage provisions are important for this coverage. Some professionals require coverage with special provisions to protect themselves from unique claims arising from their specialized services, such as consulting services.

Coverage is provided on a claims-made basis. Limits and deductibles vary with the size and type of insured. Standard limits for most small to medium sized organizations start at $1.0 million, and minimum premiums can run as low as $500. Policy forms vary significantly, but typically are claims-made forms with defense costs outside the limit and deductible.

Mercator Risk Services provides coverage for real estate agents and brokers in all 50 states. Please let us know your client's needs and we will provide you with information and assistance with your particular situation or account, and professional liability coverage.


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