Selling real estate in Florida can be risky even for the best agents because there are so many moving parts. Therefore, agents may want to take steps to protect themselves. One of those steps may be buying real estate errors and omissions insurance.
Real estate errors and omissions insurance
This type of insurance protects agents if someone sues them over their work. In most cases, the agent must pay for their legal defense. Then, if the agent loses the case, the policy pays the settlement up to the policy’s liability limit.
Things it does not cover
Real estate errors and omissions insurance will not cover you if you made an error on purpose or if you committed a criminal act. For instance, the policy will not cover you if you make false claims when showing a home. It will not cover if you physically hurt or killed someone while acting as a real estate agent. Furthermore, it will not cover the physical property damage that you caused.
Generally, you will find two different deductibles on most real estate errors and omissions insurance. The first states the amount you must pay out-of-pocket before the policy reimburses the remainder for your legal defense. The second is the amount you must pay in damages if a court rules against you before the policy pays the rest.
If you are a real estate agent working for a firm, your firm may provide this insurance at a minimum cost. Just be aware that the total amount of coverage is designed to be divided between all real estate agents. Furthermore, if you complete all paperwork on each transaction, these policies often have no deductible.