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(Updated June 2012)
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.
REALTOR® Benefits 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®.
Use of E&O Insurance in Real Estate Firms
There has been a significant decrease in the rate of E&O insurance provided by firms: 20% of all REALTORS® received it in 2010, up from 11% from the prior year.
E&O coverage as a benefit is most common in non-franchised corporation subsidiaries: In 2010, 27% of REALTORS® in non-franchised subsidiaries of national or regional corporations received E&O insurance as a benefit, compared to 26% in independent, franchised companies, and 17% in franchised subsidiaries.
Source: 2011 National Association of REALTORS® Member Profile
E&O Insurance Basics
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
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
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
eBooks.realtor.org
The following ebooks and digital audiobooks are available to NAR members:
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
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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.