Committing an error or mistake is not new to man. Being human, we find ourselves to be at fault even if we do not intend to do such slip. Errors usually come with a consequence. Most especially when you are in a legal business scenario that involves investments of other people’s finances.
In the real estate industry, professionals working for the said sector face the risk of committing an error or omission in line with duties and obligations. When an error or omission is committed that causes financial harm to another, employees in the real estate market then face lawsuits filed by unhappy clients.
Employees from the real estate market are vulnerable to a downfall on their finances because of costs incurred for legal action in their defense when facing such lawsuits. By nature, legal services and actions are expensive. But nowadays insurance company offer insurance not only for the items sold by real estate workers, but also insurance to save them from a sudden financial crash.
An Errors and Omissions Insurance Coverage is in place to protect real estate professionals from loss due to lawsuits filed related to an error or mistake made in line with the job’s responsibilities. Simply put, the insurance company pays for all expenses of legal action in defense of the insured.
The advantage of having an E&O (as how it is popularly called) typically include payments for claims filed against an error, omission, or any form of neglect in regard to the duties of the insured as a real estate professional. All defense legal action expenses for claims within the policy period also are covered.
The common exclusions of an Errors and Omissions Coverage are claims that result from dishonest or criminal acts committed by the insured, claims relating to polluted property, claims against insured for any bodily harm or death to another has been done, and claims that arise from damage to someone’s property.
An Errors and Omissions Coverage has its liability limits. This of course depends on the policy availed from the insurance company. Some policy options given by other insurance companies for the said coverage may also offer more inclusions.
The Errors and Omissions Insurance Coverage is one security measure to be taken for those working in the real estate industry. Coverage usually starts upon an initial payment for the policy. But some companies may require the insured to pay for the damages and costs of defense, if the insured is proven to be at fault.