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Field Guide to Errors & Omissions Insurance

(Updated August 2014)

The ever-increasing complexities of real estate transactions and the rising use of litigation have prompted a need for errors and omissions (E&O) insurance programs to reduce the risk to sales associates and the real estate firms they represent against potential lawsuits. The following items address E&O and professional liability insurance, answering many of the questions REALTORS® may have about how E&O insurance works and how to choose a provider. (S. Hogan, Information & Web Content Specialist)

Q - Proquest articles available for NAR members only. Password can be found on the Proquest/Find Articles page.

REALTOR Be​nefits® Program Partner

Victor O. Schinnerer & Company, Inc. and the National Association of REALTORS® have partnered under the REALTOR Benefits® Program to provide a first-class E&O insurance program to REALTOR® members. Schinnerer is one of the largest and most experienced underwriting managers of specialty insurance programs in the world, serving more than 46,000 policyholders in various specialty industries through independent insurance agents and brokers.

To learn more about Schinnerer's Real Estate Errors & Omissions Insurance Program, visit www.Schinnerer.com/NAR or call 301-961-9800. Be sure to mention that you are a member of the National Association of REALTORS®.

Some state associations also have carriers they recommend (check with your state association for this information). Please see this list for additional Errors & Omission Insurance Providers.

Use of E&O Insur​ance in Real Estate Firms

E&O Insurance Benefits in Real Estate Firms
Benefits Received by (Percentage Distribution) Firm Pays Employee Pays Both Pay Not Offered
Independent Contractors/Licensees/Agents 35% 26% 18% 21%
Salaries Licensees/Agents 23% 9% 6% 62%
Administrative Staff 33% 4% 2% 61%
Senior Management 40% 8% 5% 46%

The most common benefit that firms offer to independent contractors, licensees, and agents is errors and omissions/liability insurance, at 79%. However, many share the cost of the insurance with their employees. Among salaried licensees and agents, administrative staff, and senior management there are a larger share of firms who pay for errors and omissions/liability insurance.

Source: 2014 National Association of REALTORS® Member Profile

E&O Insurance Basics

War Stories: When E&O Insurance Can Work for You, (Victor O. Schinnerer & Co., NAR Risk Management Committee).

Real estate E&O insurance: Understanding the basics, (NAR Risk Management Committee).

Errors and Omissions coverage: An essential element of being an agent, (Edward I. Sumber P.C., June 2009).

Notes About E&O Insurance, (ActiveRain blog, Sept. 30, 2008).

Errors & Omissions Insurance: The Experience of States with Mandatory Programs for Real Estate Licensees, (Journal of Real Estate Practice and Education, 2005).  Q

No Knowledge Means no Liability, (REALTOR® Magazine Online, Sept. 2004).

Liability Insurance, (REALTOR® Magazine Online, May 2003).

Choosing the Right Coverage

How Much Insurance Does Your Small Business Need? (Huffington Post Small Business blog, Apr. 5, 2013).

5 tips for selecting the right E&O carrier, (REALTOR® Magazine, n.d.).

Buying Errors and Omissions insurance for your small business, (About.com).

E&O Insurance... What's the best type of coverage?, (ActiveRain blog, Feb. 9, 2010).

Errors & Omissions: Reduce Your Risks, Reduce Your Premiums, (REALTOR® Magazine, Apr. 2007).

E&O: Who'll defend you?, (REALTOR® Magazine, Feb. 2007).

E&O: Show Insurers the Right Stuff, (REALTOR® Magazine, Jan. 2005).

Risk Management for Brokers

Managing Real Estate Liability Risk in a Changed Market [Commercial market focus], (ACE Advisory, July 2014).

Real estate brokerage essentials: managing legal and business issues, (3rd edition, National Association of REALTORS®). Item #126-358

Risk Management Planning for Your Brokerage—video, (National Association of REALTORS®—Risk Management Committee, 2009). 

eBooks & Other Resources


The following eBooks and digital audiobooks are available to NAR members:

Real Estate Salespeople, Beware! (Adobe eReader)

Complete Book of Insurance (Adobe eReader)

It's All Your Fault: A Basic Guide to Personal Liability and Protecting Yourself in a Litigious World (Adobe eReader)

Books, Videos, Research Reports & More

The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800-874-6500 for assistance.

The no-lawsuit guide to real estate transactions, (New York, NY: McGraw-Hill, 2007).

Risk hotline for real estate: Learn from actual agent experiences before they happen to you!, (Seattle, OR: Classic Day Publishing, 2005).

Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Field Guide to Insurance Issues for Associations

Field Guide to Agency Disclosure

Field Guide to Real Estate Office Policy Manuals

InfoCentral Blog

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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.