No matter how careful a real estate professional may be, he or she is at risk, even from unfounded and frivolous lawsuits. Legal expenses must be paid no matter who wins in court, and those costs can be devastating to a real estate firm's finances. Taking preventative measures, such as documenting every encounter with a buyer or seller, will not protect a real estate professional from claims; however with professional liability insurance, defense expenses may be defrayed and large and small real estate firms can remain in business.
Who should buy Real Estate E&O insurance?
- Appraisers
- Escrow Agents
- Mortgage Brokers
- Property Managers
- Real Estate Agents
- Real Estate Brokers
- Title Agents
*Please note that all of these professionals may be written on a Miscellaneous E&O policy.
Claim Example
The insured real estate appraiser was asked to do a limited review of an appraisal property previously submitted for a loan application. The insured appraiser was unable to view the condo property because it was located in a gated community. The appraiser noted this on his report. The lender sold the property at foreclosure for a loss and claimed a scheme by the appraiser to inflate the property value.