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Real Estate Errors and Omissions (E&O)

There are over one million realtors, independent and agency-based, in the United States

In today’s ever changing housing and property market, Real Estate professionals must meet the growing demands of their clients. To protect against the financial losses incurred from errors and omissions claims, Real Estate professionals must obtain the right coverage. Whether your client is a REALTOR™, real estate agent, property manager or other real estate professional, it is crucial that your client has coverage for possible lawsuits related to negligence.

Burns & Wilcox can connect you to Real Estate Errors and Omissions (E&O) coverage to ensure that your clients are protected against financial losses. The quick response team at Burns & Wilcox understands the specific issues your clients face and can provide instantaneous, intelligent solutions.

Coverage Details and Features

Details

  • Premiums starting at $369 with self-rating application
  • $5m primary capacity on Admitted “A” rated paper
  • 2 year policy for Real Estate Express business
  • Non-profit D&O coverage $15,000 per lawsuit/$30,000 max for lawsuits
  • Disciplinary proceedings – $25,000 each claim/$50,000 per policy period
  • Full Policy Limits for:
    • Lock-box coverage applies to bodily injury & property damage
    • Open House coverage applied to bodily injury & property damage
    • Pollution coverage – failure to disclose
  • Sublimit Coverage with Option to Buy Higher for:
    • $250,000 sublimit Fair Housing Discrimination
    • $100,000 sublimit Fungi and Bacteria failure to disclose
  • Reimbursement Expense for:
    • Security Incident: 25,000 per incident/ $50,000 aggregate
    • Reputation Expense: $5,000 per policy period
    • Subpoena Assistance: $25,000 per subpoena
    • Lost earnings at attendance of trial/hearing $500 each day/$7,500 per claim/$25,000 per policy period
  • Fair Housing Discrimination – $250,000 with options to buy higher limits
  • Pollution Coverage – failure to disclose – full policy limits
  • Disciplinary proceedings – $25,000 each claim / $500,000 per policy period
  • Lockbox Coverage applies to bodily injury and property damage – full policy limits
  • Claims made and reported policy
  • Choice of defense counsel (with approval)
  • Broad definition of insured including spouse
  • Broad definition of Professional Services
  • Non-Profit Directors & Officers Coverage up to $15,000 per lawsuit / $30,000 max for all lawsuits
  • Fungi and Bacteria Coverage – failure to disclose – $100,000 with options to buy higher limits
  • Open House Coverage applies to bodily injury and property damage – full policy limits

Underwriting Appetite

  • Agent Owned Property coverage
  • Network information and security offense coverage
  • Fair housing defense
  • Lock box claims
  • Innocent insured coverage
  • Personal injury coverage
  • Duty to defend
  • Claims made policy form
  • Independent contractor coverage
  • Punitive damage coverage
  • Worldwide coverage

Additional Features

  • Pre-claim assistance tools
  • Qualified legal counsel/advise
  • Document review
  • Quarterly newsletter

 

Target Classes

  • Real Estate Agents
  • Real Estate Brokers
  • Property Managers
  • Real estate leasing agents
  • Broker price opinions (BPO’s)
  • Short term escrow agents
  • Real estate auctioneers
  • Real estate consultants/counselors
  • Business brokering (incidental)
  • Referral agents

Questions to Ask

What services do you perform?
The services that real estate agents perform can vary from by state and agency, with each service having its own potential for claims. An agent acting as a mortgage broker, for example, must collect all documents for the client to begin the loan process and find a lender to do the loan. A buyer might be unhappy with the loan officer or feel he is paying too high an interest rate and file suit. If the agent does property management and rents to an objectionable tenant, or sells a house and the buyer insists information was withheld, the real estate agent can be at the wrong end of a lawsuit. Performance of any services carries risk, especially where large amounts of money are concerned.
What are your coverage needs?
Beyond determining how much risk the real estate agency can comfortably handle, the insurance agent also needs to know about any contractual insurance obligations that must be met. An agent who is part of a franchise, for example, may need $1 million limits for E&O and perhaps coverage for discrimination claims. A client working with a builder to sell new-home construction might need $2 million per claim/$2 million aggregate limits. Every contract is different, and the insurance agent needs to know about coverage obligations right from the start.
Do you already have coverage in place? When does it expire? Why are you looking now for coverage?
When the cost of errors & omissions (E&O) coverage is high, clients sometimes have buyers’ remorse. A few months into a policy, they may contact another insurance agent for a better deal, then attempt to cancel the first policy. Shopping a midterm change can be an expensive and disruptive practice for insurance agents and brokers since many reputable markets will refuse to write a claims-made policy while another is still in force. In such cases, it is usually best to wait until renewal. Sometimes, though, a real estate agency enters into a new contract that has with coverage requirements its current insurer can’t meet, so it must find the coverage quickly. By understanding and explaining the material reason for a midterm renewal, an agent is much more likely to get a client a good midterm placement.
Are you working with another agent to get a quote for errors & omissions coverage?
In segments of the real estate industry, it may be routine for several agents to try to sell the same piece of property at the same time, but in the world of complex liability insurance, there is a decided disadvantage to the client to have several agents shopping the same piece of business. In most cases, a carrier will consider a piece of real estate E&O business just once. That means if the first insurance agent or broker fails to effectively explain the risk causing underwriters to reject the business or provide a very high quote, that market is blocked. Another, more savvy insurance broker, has no chance to use their expertise and relationships to make a better case for the client.
What does your agency do to keep your sales agents up-to-date on changes in your industry?
A good program of risk management can limit claims and improve a risk’s profile. One successful real estate agency holds mandatory monthly in-house seminars on topics like market changes, legal changes and handling risky transactions. It also encourages Realtors to take continuing-education classes.

At Burns & Wilcox our expertise becomes your expertise. Our marketing materials are designed to help you give your clients what they want to hear – yes to almost any hard-to-place-risk.

$4,800

Real Estate Sales & Property Management

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