Liability insurance is one of the costs of doing business. In an increasingly litigious world, errors and omissions insurance may provide a firewall for brokers and agents.

Errors and omissions insurance provides comprehensive protection for real estate agents and brokers. It is the equivalent of the professional liability insurance carried by physicians, attorneys, architects, and other professionals who have seen significant increases in liability claims in recent years.

While more and more real estate companies are realizing the necessity of carrying this type of insurance for their licensees and other employees, many real estate professionals are still operating with no professional liability coverage. If a claim is filed against an agent who doesn’t have E&O coverage, the result can be professionally and financially disastrous. Common claims filed against real estate professionals range from misrepresentation of a property’s physical condition to failure to negotiate a sale.

"All E&O insurance differs in the range and quality of its coverage and administration," says Dave Crawford, senior vice-president of sales for American Home Shield. "Real Estate brokers and agents are primarily concerned, as they should be, with selling homes. They are typically not experts in what type of insurance they need to protect themselves from the increasing onslaught of after sale claims and lawsuits."

American Home Shield is introducing a new E & O insurance program for agents and brokers through partnerships with Fireman’s Fund Insurance Company , which insures the policies, and Cal-Surance Associates, Inc. which administers and services the accounts. Cal-Surance currently has over 100 programs that insure nearly 100,000 real estate brokers and agents, life insurance agents, property and casualty insurance agents, and financial professionals.

According to Crawford, the new E&O partnership will provide better service along with lowered premiums. The company plans to offer the insurance along wit h its home warranty packages as a risk management strategy for agents and brokers.

The E&O policy offered by American Home Shield includes:

• "A" rated insurance carrier
• First Dollar Defense coverage
• Discrimination and Pollution coverage
• Insured owned property coverage

The program also offers Seller E&O coverage, reduced deductible options, dedicated claims management support, available customized risk management seminars, and a simple application process.

Real estate professionals can get more information about this program by calling American Home Shield at 1-800-735-4663.

Published: November 24, 1998

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