Understanding E&O Insurance for Texas Real Estate Professionals

The Texas real estate market is rife with opportunities but may also require businesses and consumers to navigate a labyrinth of potential pitfalls. Given the Lone Star State’s vastness, including bustling metropolises, beautiful coastlines, sprawling landscapes and diverse climates, real estate professionals’ duties can be complicated, and errors may be inevitable. Fortunately, you can cultivate an invaluable financial safety net by securing appropriate errors and omissions (E&O) insurance.

What Is E&O Insurance?

Also known as professional liability insurance, E&O policies are integral to a real estate professional’s risk management and loss control measures. Regardless of your best intentions and extensive experience, you may eventually make a mistake, potentially providing inaccurate advice to a client and causing them expensive losses. In such situations, they may sue you, meaning that, without appropriate E&O coverage, you could face devastating out-of-pocket losses.

What Can My Policy Cover?

E&O insurance can vary in its coverage and parameters, but your policy can generally offer financial aid in response to many common incidents and accusations. Specifically, if clients or customers make any of the following allegations, your coverage may help manage legal expenses and losses:

• Misrepresentation
• Inaccurate calculations
• Mistaken advice
• Oversights
• Omissions
• Missed deadlines

What Are Some Real-life Examples?

As a real estate professional in Texas, you may encounter many situations where you could potentially face E&O-related claims. Consider the following examples that might quickly incur significant out-of-pocket losses for those lacking appropriate coverage:

• As a real estate company, you host an open house for a client, but while speaking with prospects, fail to mention a critical flaw in the home, such as failing foundations or a deteriorating roof.
• While listing a commercial property for sale, you misrepresent its location, such as by overstating its closeness to a highway or airport.
• In the process of closing a sale, you provide incorrect legal information to a client, resulting in them violating a law or contract.

How to Choose the Right Policy

At Associated Insurance in Weatherford, TX, we’re well-versed in E&O insurance. Our dedicated team has the knowledge and experience to assess real estate professionals’ needs and identify appropriate coverage solutions. Contact us today to learn more and find a policy tailored to your needs.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.