Call Now: 910-338-1773

What Is Real Estate Errors And Omissions Insurance

Real Estate Errors and Omissions Insurance, also known as Professional Liability Insurance and E&O Insurance, is a specialized type of liability insurance designed to protect real estate professionals from claims made by clients for inadequate work or negligent actions. This type of insurance covers a range of potential issues, including:

  • Misrepresentation: Inadvertently providing incorrect information about a property.
  • Negligence: Failing to perform duties to the standard expected in the real estate  industry.
  • Omissions: Leaving out critical information that affects the transaction.

Why Your Real Estate Business Needs E&O Insurance

In the high-stakes world of real estate, even the most experienced professionals can make mistakes. An unhappy client could potentially file a lawsuit, claiming financial losses due to your actions or advice. Without E&O insurance, you could face significant legal expenses and damages, which could be devastating to your business.

Are you looking for Business Insurance Coverage? At The Huneycutt Group, we represent over a dozen companies and brokers to help you find the coverage you’re looking for, at the right price.

Is E&O Insurance Required For Real Estate Professionals In North Carolina?

While E&O insurance is not legally required for all real estate professionals in North Carolina, it is highly recommended. Many brokers and agencies require their agents to carry E&O insurance as a condition of employment or partnership.

Two types of business insurance that are mandatory by state law are:

Key Features Of Our E&O Insurance Policies

At The Huneycutt Group, we understand the unique risks faced by real estate professionals in North Carolina. We will tailor your E&O insurance policy to meet your specific needs, providing you with the peace of mind to focus on your business. Key features of our policies include:

Other Products Image

Comprehensive Coverage

Protection against a wide range of potential claims, including errors, omissions, and negligence.

Other Products Image

Legal Defense Costs

Coverage for the costs associated with defending against a claim, including attorney fees and court costs.

Other Products Image

Customized Solutions

Policies tailored to the specific needs of your business, whether you are a solo practitioner or part of a larger firm.

Who Should Have Real Estate E&O Insurance?

Real Estate Errors and Omissions (E&O) Insurance is a vital safeguard for many professionals within the real estate industry. Here’s a closer look at who should consider having this type of insurance:

Real Estate Agents

Real estate agents frequently interact with clients, handle property transactions, and provide advice that can have significant financial implications. Your real estate firm may or may not carry this for you. It’s important to know for sure.

Real Estate Brokers

Brokers oversee agents and are involved in managing larger transactions and negotiations. They face potential liability for their own actions and those of the agents they supervise. E&O insurance is essential for protecting brokers from legal claims related to their supervisory role.

Real Estate Firms

Real estate firms, whether large or small, have multiple agents and brokers working under their umbrella. The firm itself can be held liable for the actions of its employees. E&O insurance for the firm ensures that the business is protected from significant financial losses due to lawsuits.

Property Managers

Property managers handle the day-to-day operations of rental properties, including tenant interactions, maintenance, and financial management. Errors or omissions in these duties can lead to claims from property owners or tenants. E&O insurance provides crucial protection for property managers.

Real Estate Consultants

Consultants provide specialized advice and services related to real estate investments, development projects, and market analysis. Their recommendations can have substantial financial impacts, making E&O insurance necessary to cover potential claims of professional negligence.

Other Professional Lines

Real Estate Errors and Omissions Claims Examples

1. Misrepresentation of Property Condition

Scenario: A real estate agent listed a property and described it as having “newly installed roofing and plumbing systems.” After purchasing the property, the buyer discovered that both the roof and plumbing were old and required significant repairs.

Claim: The buyer filed a claim against the agent for misrepresentation, seeking compensation for the cost of repairs and alleging financial loss due to inaccurate information.

2. Failure to Disclose Material Facts

Scenario: A property manager failed to disclose a known issue with mold in a rental property. After moving in, the tenants experienced health problems related to the mold and incurred medical expenses.

Claim: The tenants filed a lawsuit against the property manager, claiming negligence and failure to disclose critical information that impacted their health and safety.

3. Errors in Property Valuation

Scenario: A real estate appraiser provided an inaccurate property valuation that was significantly higher than the market value. Based on this appraisal, the buyer overpaid for the property and later struggled to sell it at the same price.

Claim: The buyer sued the appraiser for providing an incorrect appraisal, seeking damages for the financial loss incurred from the overvaluation.

4. Negligent Advice on Zoning and Land Use

Scenario: A real estate consultant advised a client that a property could be used for commercial purposes, despite zoning laws restricting it to residential use. The client purchased the property based on this advice and later discovered the zoning limitations, resulting in financial loss.

Claim: The client filed a claim against the consultant for negligent advice and sought compensation for the lost investment and associated costs.

5. Breach of Fiduciary Duty

Scenario: A real estate broker was responsible for managing a client’s property portfolio. The broker made several investment decisions without the client’s approval, resulting in significant financial losses.

Claim: The client sued the broker for breach of fiduciary duty, alleging that the broker’s unauthorized actions led to substantial economic damage.

How Much Will E&O Insurance Cost For Your Real Estate Business?

The cost of E&O insurance can vary based on factors such as the size of your business, the number of transactions you handle, and your claims history. Our team at The Huneycutt Group can provide you with a customized quote based on your specific needs.

How To Choose The Best E&O Insurance Policy For Your Real Estate Business

Choosing the best E&O insurance policy for your real estate business involves considering several key factors:

  • Coverage Limits: Ensure the policy provides adequate coverage for potential claims.
  • Policy Exclusions: Understand what is not covered by the policy to avoid surprises.
  • Claims Handling Process: Look for insurers with a reputation for efficient and fair claims processing. Our agents at THG represent companies with exceptional claims service and can help you navigate these waters.
  • Cost: Compare premiums and choose a policy that offers good value for the coverage provided.
  • Customization: Consider whether the policy can be tailored to meet the specific needs of your business.

How Do I File A Claim On My E&O Insurance Policy?

If you need to file a claim, contact your insurance provider immediately. Provide all necessary documentation and details about the claim. At The Huneycutt Group, we guide you through the claims process to ensure a smooth and efficient resolution.

Why Choose The Huneycutt Group For Real Estate E&O?

Choosing the right E&O insurance policy can be overwhelming, but The Huneycutt Group is here to make the process easier. Here’s why you should consider us for your insurance needs:

  • Expertise: Our team has extensive experience in the insurance industry, specifically in providing coverage for real estate professionals.
  • Personalized Service: We take the time to understand your unique needs and provide customized insurance solutions.
  • Local Knowledge: As a North Carolina-based agency, we are familiar with the specific legal and regulatory requirements of the state.
  • Commitment to Excellence: We are dedicated to providing top-notch customer service and ensuring that you have the coverage you need to protect your business.

Contact us today to learn more about how we can tailor an E & O policy to meet your specific needs and protect your business.

Insurance Companies And Brokers We Represent

Builders Mutual
Liberty Mutual
The Hartford
Philadelphia Insurance

Lloyds of London
Berkshire Hathaway
NC Rate Bureau
Johnson & Johnson

Appalachian Underwriters
Jackson Sumner

Contact The Huneycutt Group