Working in real estate can be a lucrative and fulfilling career. However, sometimes, mistakes still happen. When they do, a deal can fall apart and your clients can decide to take legal action. You don't want to be left unprotected. That's where real estate agent errors and omissions (E&O) insurance can help.
What is real estate agent E&O insurance?
Real estate E&O insurance is a type of professional liability coverage that can protect your business from unexpected expenses if someone accuses you of:
- Professional negligence
- Making a mistake that causes someone else financial harm
In the numerous conversations involved with every real estate deal, a disagreement could escalate into legal action against you. Let’s hope that never happens, but if it does, your E&O insurance can help pay for defense costs and expenses if you are sued, and judgments if you are ruled at fault, up to your policy limits.
In this article, we'll highlight some of the ways real estate agent insurance can help protect your business, and how E&O coverage comes into play.
How E&O insurance protects real estate agents
There are several ways E&O insurance can help real estate agents, including helping to cover expenses related to court costs, lawyer fees, and any judgments or settlements against you. Here are some real-world examples:
1. Making a mistake that impacts a deal
Mistakes happen a lot more than you might realize with real estate agents, even for seasoned professionals.
For example, after a buyer and seller get into negotiations, it's discovered there is a lien on the house, which was never communicated to your client, the buyer. You could be accused of not disclosing that information.
If your client decides to sue you, your real estate E&O coverage could help pay for related expenses.
2. Not delivering on promised services
As a real estate agent or broker, part of your job is to act in your client's best interest. If they feel like you've missed the mark, you could get sued. Real estate agent E&O insurance helps protect you and your business from some of these examples:
An angry buyer: At the close of a deal, your client, who is the buyer, feels like you didn't do a good enough job negotiating the price and decides to sue.
Misinterpreted advice: You tell your client that the sellers will probably cover the closing costs in the deal, but you still need to confirm. It turns out later that's not the case, and your buyer will have to contribute to the costs, which they didn't expect.
3. Complaints of indifference or neglect
Negligence means you haven't met standards set by the industry. It's crucial to understand that a client can sue you if they feel you haven't performed to their standard. Here are some examples:
Omitting information: A home you're selling has a long-standing termite problem that you were unaware of. Your client asks you to pay for extermination costs after he moves into the house.
Providing and tracking documents: You must provide your client with all the necessary information, including required and requested paperwork. Otherwise, you might be called negligent.
Zoning: Even if you weren't aware there was a zoning issue on a piece of property, your client could claim you should have done your due diligence to find out that information before it was too late.
As you can see, there are plenty of potential problems real estate agents need to be on the lookout for when dealing with clients.
Making mistakes, not delivering on promised services, and complaints about neglect can derail your business if you aren't covered. Real estate agent insurance can help protect you and take care of associated costs if you receive a complaint.

Other policies for real estate professionals
E&O isn't the only type of insurance coverage for real estate agents. Here are a few other options you can consider to make sure you have insurance for all the risks you face.
General liability insurance
Real estate agents should consider general liability insurance because it helps protect you and your clients from accidents and injuries. For example, if you’re showing a house during a virtual open house and you accidentally damage an expensive antique, your coverage could help pay for repair or replacement costs .
Commercial auto insurance
For real estate agents, your car is a vital part of your business. You use it to meet and transport clients, so you want protection. Plus, many states require commercial auto insurance for business-owned vehicles.
Something else to consider is most personal auto insurance policies offer limited coverage for professional use. Having a commercial auto insurance policy provides more security for you, your car, and other people involved in an accident.
Workers' compensation insurance
If you have employees, workers' compensation insurance provides important protection — and it's required by law in most states.
If you or one of your employees gets into an accident, becomes sick or injures themself on the job, workers' comp insurance can help cover hospital bills, lost wages and other costs. That can save your business from the financial strain of covering costs, and potentially even bankruptcy.
How NEXT Insurance helps real estate agents
NEXT Insurance offers real estate agents business insurance that can be customized to meet your needs.
All you need to do is answer a few questions about your real estate business, and you can get an online quote in just a few minutes. If you decide to get a policy through NEXT Insurance, you can instantly access your certificate of insurance (COI) online at any time. That certificate can help boost your marketing efforts and attract more potential clients.
Choose between monthly or annual payment, and cancel your policy at any time. There are no hidden fees, and you’ll have support from our U.S.-based insurance providers.