Which states require E&O insurance for real estate agents?

Find out which states legally require E&O insurance for real estate agents and how it can be beneficial.

Chris Butsch - Writer for NEXT Insurance
By Chris Butsch
Kelly Hendrickse - editor for NEXT Insurance
Edited by Kelly Hendrickse
Matt Crawford for NEXT Insurance
Fact-check by Matt Crawford

Updated June 2, 2023.

While all real estate agents need licenses, errors and omissions (E&O) insurance is not required by law in every state.

Here are the states where real estate agents legally need E&O insurance:

  • Alaska
  • Colorado
  • Iowa
  • Idaho
  • Kentucky
  • Louisiana
  • Mississippi
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • South Dakota
  • Tennessee

Operating without uninterrupted E&O coverage in these states can cost you more than just a lawsuit. The Colorado Division of Real Estate, for example, may issue fines and penalties and deactivate your license entirely. This can also happen if you fail to produce a valid insurance certificate.

» Check out this comprehensive guide on real estate agent licenses

Why is E&O insurance beneficial for real estate agents?

E&O coverage can help protect you or your brokerage from hefty legal fees and large settlements. It can also help instill confidence in your clients.

Some larger clients may require you to carry E&O coverage, regardless of state laws, before signing on with you. I've seen medium-sized firms in Georgia get passed over in favor of smaller shops simply because the latter had better E&O coverage.

How NEXT can help real estate agents with E&O coverage

Required or not, E&O coverage can provide cover if you're faced with negligence or misrepresentation claims, plus encourage trust from your clients.

This can give you peace of mind to focus on your day-to-day tasks. And NEXT can help with this.

We offer fast, affordable and tailored real estate agent insurance. To view your options, simply apply online and get an instant quote in less than 10 minutes. Once you acquired your insurance, you can share your certificate of insurance instantly anywhere, anytime and for free with the NEXT app.

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