PL and E&O for RE: A small business insurance alphabet soup real estate agents need
April 29, 2014
It can take years to build your real estate business. Make sure you follow these steps to ensure you’re properly insured with the right small business insurance coverage.
Misunderstandings and oversights happen and with the emotional component involved in buying or selling a home they’re hard to avoid completely. What if the buyer expects the wine cooler to be included with their purchase, but your client (the seller) planned on moving it to their new home? What if your client experiences a bit of buyer’s remorse, feels you were misleading in how much work the structure needed and sues you for the overage expenses? What if a client alleges their couch or other personal items were damaged during an open house and demand it be replaced? Disputes like these can escalate to lawsuits quickly, taking your time, creating mountainous legal costs for you to climb – and maybe eating up your hard-earned commission. And that’s where small business insurance for real estate professionals comes in.
Professional liability insurance will be there in instances like those above and many others. PL, as it’s referred to, is also known as errors and omissions coverage (E&O). Regardless of which name for it you think sounds best, this coverage protects you if you’re sued for negligence as a real estate professional, whether or not you made the mistake in question. If a client claims you didn’t provide your service to the agreed-upon standard and sues you for giving incorrect advice, PL will provide you with the coverage you may need. And covered claims may also include attorney representation if you need it. Like all real estate professionals, you’re constantly multitasking and wearing many hats. When that innocent mistake happens as a result, don’t let it ruin your reputation or sink your business. For more tips on making sure you’re taking the right steps for a successful real estate career, see these helpful tips from the About.com Real Estate Business section. The contents of this article and the linked materials do not offer legal, business, or insurance advice related to the needs of any specific individual business. Hiscox Small Business Insurance is underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated ‘A’ (Excellent) by A.M. Best Company. Additional information can be found on the Why Choose Hiscox?