Real Estate Errors and Omissions (E&O) Insurance Explained

Real estate E&O insurance is a type of professional liability coverage designed to protect real estate professionals. Agents, brokers, property managers, and appraisers use this coverage to defend against claims of negligence, mistakes, or omissions in their work.

Below are the key coverages included in a real estate E&O insurance policy.

Professional Liability Coverage

This is the core of real estate E&O insurance. It protects you if a client accuses you of providing faulty advice, missing key details, or failing in your professional duties. The policy helps cover legal defense, settlements, and court judgments.

Legal Defense Costs

Most real estate E&O policies cover legal defense expenses. This includes attorney fees, court costs, and related legal fees. Even if the claim has no merit, this coverage helps you handle legal challenges without draining your finances.

Disciplinary Proceedings Coverage

Some policies include coverage for defending yourself during disciplinary actions. If a regulatory body or licensing board investigates your conduct, this coverage pays for legal representation and related defense costs.

Prior Acts Coverage (Retroactive Coverage)

Prior acts coverage extends protection to services you performed before your current policy started. If someone files a claim about work you did in the past—before your current coverage began—this feature keeps you protected.

Personal and Advertising Injury Coverage

This coverage protects against claims of defamation, slander, libel, or copyright infringement tied to your marketing. It’s helpful if your promotional materials or listings result in a lawsuit.

Supplementary Payments

Your policy may include supplementary payments for additional costs. These could include court-ordered interest, settlements, or other reasonable legal expenses approved by your insurer.

Final Thoughts

Real estate E&O insurance helps professionals manage legal risks tied to everyday business operations. Whether you’re closing a deal, managing properties, or marketing listings, this coverage keeps you protected if things go wrong.