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Understanding Real Estate Agency E&O This 2022

A title mistake or omission in a property listing might result in a lawsuit. Whether you are sued by a litigious customer or committed a legitimate mistake, errors, or omissions, insurance may assist cover legal fees that would otherwise harm your organization.

This article will help you understand real estate agency errors and omissions. Continue reading.

What Is Errors and Omissions Insurance?

Errors and omissions insurance (E & O) is professional liability insurance that should protect businesses and employees against customer claims for poor work or careless behavior.

This insurance may cover both court expenses and settlements up to the maximum extent of the insurance contract. It's an important policy for real estate professionals, and it's even mandated in certain jurisdictions for agents and brokers.

What Does Real Estate Errors and Omissions Insurance Cover?

You must inform your client about your house's necessary details when selling. If you overlook a critical element, it might cost them money and lead to a lawsuit against your company. Here are some examples of Errors and Omissions in insurance coverage:


Negligence is the failure to follow the norms of behavior established by the law to guarantee the safety of others. If you own a real estate company, you should inform your staff of the risks associated with property condition disclosures.

For example, the customer wants to acquire a property that has termite damage. If you fail to notify them of this condition and they discover it later, you may be sued.


The most prevalent claim asserted in real estate lawsuit cases is misrepresentation–the misstatement of facts related to a property during a real estate transaction. If neglect misses an important detail, this one conceals the problem while promoting the property as faultless.

For example, you engage in deception if you tell clients that a 750-square-foot house is 1,000 square feet. You may face legal action as a result of this fraudulent behavior.

Professional Error

If a client alleges you made a mistake that resulted in financial loss, you might stand to lose a lot of money. For example, a real estate agent who commits a mistake with the price per square footage may risk a large lawsuit.

Legal Expenses Covered by Errors and Omission Insurance

If you are the target of a lawsuit, you should file a claim with your insurance provider. Here are some of the fees that they may be able to help you pay for:

  • Court costs

  • Lawyer's fees

  • Settlements and verdicts

  • Administrative expenses


There will be instances when your organization will make a mistake or two, whether you like it. After all, you are all human and make errors. So, the best way to minimize future harm to your company and its reputation is to reduce the risks by acquiring insurance.

At Second Western Insurance Services, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (818) 952-5203. Get your free quote today by CLICKING HERE. The coverage discussed in this article is not guaranteed. Please call our agents, we are happy to help you learn more about your plan and make sure you have the coverage you need.


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