References
NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.
NAR REALTOR Benefits®
Victor Insurance Managers LLC and the National Association of REALTORS® have partnered under NAR REALTOR Benefits® to provide a first-class E&O insurance program to REALTOR® members. Several premium credits are available, as allowed by state law, including a credit for being an NAR member, holding select NAR designations, continuing education, use of standard contracts, use of home warranties, risk management programs, etc. A longevity credit is available for firms that have been insured with Victor for three years, with additional longevity credits available after reaching the five-year mark and ten-year marks.
To learn more about Victor’s Real Estate Errors & Omissions Insurance Program, take a look at their program brochure or call 888-429-6638. Be sure to mention that you are a member of the National Association of REALTORS®.
Some state associations also have carriers they recommend (check with your state association for this information). Please see this list for additional Errors & Omission Insurance Providers.
Use of E&O Insurance in Real Estate Firms
Source: 2023 National Association of REALTORS® Profile of Real Estate Firms
E&O Insurance Basics
Errors & Omissions Insurance Guide for Real Estate (The Close, Jun. 10, 2024)
Having E&O insurance is a must to protect your career and financial stability. Every real estate professional should understand common errors and know what the insurance covers to help safeguard them against the unpredictable challenges of the industry. Whether it’s mandatory or not, this insurance gives you the confidence to navigate potential legal disputes while continuing to build trust with your clients.
When Real Estate Errors & Omissions Insurance is Required (CRES A Gallagher Company, May 1, 2024)
Real estate licensees need to be aware that even if your brokerage does hold E&O insurance for you, there might be limitations, exclusions, or gaps. There is still great benefit in having an individual real estate E&O policy that can be customized to your specific needs. Having a tailored policy puts you in control of your own protection and provides better coverage than a simple, ‘off-the-shelf’ solution.
Errors and Omissions Insurance (E&O): What It Covers (Investopedia, Apr. 16, 2024)
Errors and omissions (E&O) insurance is a type of liability insurance that covers claims against your business for mistakes you made or services you failed to provide. E&O insurance protects your business from claims by clients for negligence, malpractice, errors, or omissions you allegedly made while providing a professional service. The insurance helps pay for your legal fees and any owed damages or settlements.
Choosing the Right Coverage
Real Estate Liability Coverage, Deciphered (Raymond James, Jun. 27, 2024)
Professional liability insurance policies vary, but coverage typically includes legal defense costs, settlements and judgements from covered claims.
It’s important to note that while professional liability coverage is a critical protective measure for real estate professionals, agents typically need to have general liability insurance to cover any medical or legal defense costs that stem from injury or property damage-related claims.
While some states (or real estate boards) require agents to carry a professional liability insurance policy, in others it’s a voluntary decision made by the agent or their brokerage. Premium costs can differ state to state, and selling commercial versus residential real estate can potentially impact premium costs.
What is 'Tail Coverage' and How Does It Work in Real Estate? (VanEd, Jun. 14, 2024)
E&O Tail coverage is a special coverage that applies to your past transactions, even after your standard E&O coverage has lapsed, and it is attached to your real estate license. Tail coverage is also referred to as Extended Reporting Period (ERP) coverage because its purpose is to keep you insured after your license lapses, expires, or otherwise becomes inactive, such as at retirement. The coverage only applies to actions taken while under the primary E&O period when your real estate license is active.
How to Compare Errors and Omissions Insurance Quotes (TechInsurance)
Insurance companies are typically ranked A to E, with A as the top rating. The higher the rating, the more financially stable the carrier. That's why you usually want to buy errors and omissions insurance from a carrier rated A or better.
Risk Management for Brokers
Real Estate Risk Management Guide & Checklist (Embroker, Aug. 5, 2024)
Here’s how to stay honest and protect yourself:
- Always verify information before passing it on to clients. Don’t rely solely on what the seller tells you about a property.
- Disclose everything you know about a property, even if it might make the sale more difficult.
- Be clear about what you don’t know. It’s okay to say, “I’m not sure, but I’ll find out for you.”
- Keep detailed records of all communications and transactions.
If you’re ever in doubt about whether to disclose something, err on the side of caution and disclose.
A Guide to Risk Management in Real Estate (Acclaimant, Jun. 25, 2024)
Create best practices to monitor and mitigate risks. Streamline workflows and implement best practices with a risk management platform. This solution can also measure and score reports from property inspections and evaluations to highlight red flags and risk patterns. By continuously monitoring for risks, you can identify potential threats before they happen and create a response plan to minimize negative impacts.
Errors and Omissions Lawsuit Tips for Real Estate Professionals (Insureon, Apr. 19, 2024)
What can put your real estate or title brokering business at the center of a million-dollar lawsuit? Here are some common triggers for E&O claims:
- Misrepresentation of the property condition, boundaries, or size
- Nondisclosure
- Failure to verify information given by the seller to the buyer
- Undisclosed or undetected water damage, infestation, or sewage or septic problem
- Errors in the home inspection (the inspector failed to note cracks in the foundation, a leaky roof, etc.)
- Violations of your state’s real estate regulations (such as fair housing rules)
- Error in zoning interpretation
- Error in comparative market research report
- Inaccurate appraisal
- Inadvertently offering bad or inaccurate advice
- Bank mortgage error
- Breach of confidentiality
Hot Topics in Broker Risk Reduction (National Association of REALTORS®, Nov. 2023)
Avoid using AI to draft contracts, modify standard forms, or provide legal advice to clients. Instead, seek appropriate advice from actual professionals.
Tips for Managing Risk & Managing Reputation Bundle (Digital Download), (National Association of REALTORS®) Item #135-101
This unique combination of eProduct's was specifically created for you to help manage risk. This combination bundle will help you succeed with social media and will also help you make the right E & O insurance decisions.
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
Complete Book of Insurance (eBook)
Insurance for Dummies® (eBook)
Books, Videos, Research Reports & More
As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.
The No-Lawsuit Guide to Real Estate Transactions (New York, NY: McGraw-Hill, 2007)
Risk Hotline for Real Estate: Learn from Actual Agent Experiences Before They Happen to You! (Seattle, OR: Classic Day Publishing, 2005)
Have an idea for a real estate topic? Send us your suggestions.
The inclusion of links on this page does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this page complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.