Field Guide to Errors & Omissions Insurance
(Updated November 2009)
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 Specialist)
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: Only 13% of all REALTORS® received it in 2008, down 10% from the prior year.
E&O coverage is more common in non-franchised subsidiaries: In 2008, 17% of REALTORS® in non-franchised subsidiaries of national or regional corporations received E&O insurance as a benefit, compared to 13% in franchised subsidiary companies.
Source: 2009 National Association of REALTORS® Member Profile
Risk Reduction 
Broker toolkit: risk management, (REALTOR® Magazine Online).
Law: E&O, (REALTOR® Magazine, Feb. 1, 2007).
E & O Insurance Basics
Real estate E&O insurance: Understanding the basics, (Letter of the Law).
Errors and Omissions coverage: An essential element of being an agent, (John Dolgetta, Esq., Carmel, NY: Edward I. Sumber P.C., June 2009).
Errors & Omissions insurance: The experience of states with mandatory programs for real estate licensees, (Journal of Real Estate Practice and Education, 2005).
Choosing the Right Coverage
5 tips for selecting the right E&O carrier, (REALTOR® Magazine Online).
Buying Errors and Omissions insurance for your small business, (About.com).
The ins and outs of E&O: Reduce your risks, reduce your premiums, (REALTOR® Magazine, Apr. 1, 2007).
E&O Resources & Products
2009 NAR Professional Liability Insurance Program, (Letter of the Law).
Real estate brokerage essentials: managing legal and business issues, (3rd edition, NATIONAL ASSOCIATION OF REALTORS®). Item #126-358
eBooks & Other Resources
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). KF 665 N54
The real estate entrepreneur: Everything you need to know to grow your own brokerage, (New York, NY: McGraw-Hill, 2007). HD 1375 P41
Risk hotline for real estate: Learn from actual agent experiences before they happen to you!, (Seattle, OR: Classic Day Publishing, 2005). HD 1375 R22
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 to 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.
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