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Real Estate Errors and Omissions (E&O)

Obtain Real Estate E&O though Burns & Wilcox

Coverage for those in the Real Estate industry

In today’s ever changing housing and property market, Real Estate professionals must meet the growing demands of their clients. To protect against the financial losses incurred from errors and omissions claims, Real Estate professionals must obtain the right coverage. Whether your client is a REALTOR™, real estate broker, property manager or other real estate professional, it is crucial that your client has coverage for possible lawsuits related to negligence.

Burns & Wilcox can connect you to Real Estate Errors and Omissions (E&O) coverage to ensure that your clients are protected against financial losses. The quick response team at Burns & Wilcox understands the specific issues your clients face and can provide instantaneous, intelligent solutions.


Coverage Details and Features

Coverage Details

  • Self‐rating application program available
  • Admitted “A” rated paper or Surplus Lines available
  • 2 year policy for Real Estate Express business
  • Non-profit D&O coverage $15,000 per lawsuit/$30,000 max for lawsuits
  • Disciplinary proceedings – $25,000 each claim/$50,000 per policy period
  • Full Policy Limits for:
    • Lock-box coverage applies to bodily injury & property damage
    • Open House coverage applied to bodily injury & property damage
    • Pollution coverage – failure to disclose
  • Sublimit Coverage with Option to Buy Higher for:
    • $250,000 sublimit Fair Housing Discrimination
    • $100,000 sublimit Fungi and Bacteria failure to disclose
  • Reimbursement Expense for:
    • Security Incident: 25,000 per incident/ $50,000 aggregate
    • Reputation Expense: $5,000 per policy period
    • Subpoena Assistance: $25,000 per subpoena
    • Lost earnings at attendance of trial/hearing $500 each day/$7,500 per claim/$25,000 per policy period
  • Fair Housing Discrimination – $250,000 with options to buy higher limits
  • Pollution Coverage – failure to disclose – full policy limits
  • Disciplinary proceedings – $25,000 each claim / $500,000 per policy period
  • Lockbox Coverage applies to bodily injury and property damage – full policy limits
  • Claims made and reported policy
  • Choice of defense counsel (with approval)
  • Broad definition of insured including spouse
  • Broad definition of Professional Services
  • Non-Profit Directors & Officers Coverage up to $15,000 per lawsuit / $30,000 max for all lawsuits
  • Fungi and Bacteria Coverage – failure to disclose – $100,000 with options to buy higher limits
  • Open House Coverage applies to bodily injury and property damage – full policy limits

Additional Features

  • Pre-claim assistance tools
  • Qualified legal counsel/advise
  • Document review
  • Quarterly newsletter


Target Classes

(including but not limited to)

  • Real Estate Agents
  • Real Estate Brokers
  • Property Managers
  • Real estate leasing agents
  • Broker price opinions (BPO’s)
  • Short term escrow agents
  • Real estate auctioneers
  • Real estate consultants/counselors
  • Business brokering (incidental)
  • Referral agents

Claims Examples

Negligence at Auction
A real estate company was retained to represent the lender at a foreclosure sale for a suburban home. Although the lender had instructed the company about the minimum amount that they needed to raise, the Realtor mistakenly opened the bid at half of what the lender instructed. With little buyer interest, a third party outbid the opening amount by only few dollars and the sale raised far less than the lender had invested in the property. The lender alleged negligence by the real estate company, claiming that the real estate company owed the lender the balance remaining on the mortgage. The costs of settlement and defense exceeded $100,000
Failure to Disclose
A couple purchased a house through a Realtor in what appeared to be a peaceful neighborhood, but a problem arose their first night. The house next door was overrun with dogs that barked or howled at any sound and would sometimes get loose and dig beneath the fence into their yard. The neighbor's pets were a known nuisance in the neighborhood ­­ police records attested to numerous calls from the previous owner to try to rectify the situation ­­ but neither the Realtor nor the previous owner had disclosed this to the buyers. The buyers sought to rescind the purchase based on the failure to disclose a known nuisance and also named the real estate agent as a defendant for allegedly advising the seller not to disclose the material information. Defense and settlement costs for the Realtor were more than $50,000.
Dropping the Ball
A real estate broker was handling the closing for a residential property that had been on the market for months. A week before the scheduled closing, the broker was hospitalized and failed to contact an associate to handle the paperwork and the closing. When the sale could not close on the agreed­upon date, the buyer withdrew his offer. The seller named the broker in a lawsuit alleging negligence, breach of contract, breach of a covenant of good faith and fair dealing. Though a second buyer eventually purchased the property at a higher price and the case was withdrawn, the broker’s defense costs exceeded $50,000.
Poor Property Management
The owner of a large commercial building hired a contractor to repair five elevators at a cost of $100,000 each, with the money paid at the completion of each elevator repair. Unfortunately, the property manager ignored the contract provisions and advanced money to the repair company before the project was completed. The repair company then stopped work, leaving two elevators partially repaired. The owner had to hire and pay a new repair contractor to complete the project. The building owner sued the property manager to recover the money he improperly paid to the first repair company.

Questions to Ask

What services do you perform?
The services that real estate agents perform can vary from by state and agency, with each service having its own potential for claims. An agent acting as a mortgage broker, for example, must collect all documents for the client to begin the loan process and find a lender to do the loan. A buyer might be unhappy with the loan officer or feel he is paying too high an interest rate and file suit. If the agent does property management and rents to an objectionable tenant, or sells a house and the buyer insists information was withheld, the real estate agent can be at the wrong end of a lawsuit. Performance of any services carries risk, especially where large amounts of money are concerned.
What are your coverage needs?
Beyond determining how much risk the real estate agency can comfortably handle, the insurance agent also needs to know about any contractual insurance obligations that must be met. An agent who is part of a franchise, for example, may need $1 million limits for E&O and perhaps coverage for discrimination claims. A client working with a builder to sell new-home construction might need $2 million per claim/$2 million aggregate limits. Every contract is different, and the insurance agent needs to know about coverage obligations right from the start.
Do you already have coverage in place? When does it expire? Why are you looking now for coverage?
When the cost of errors & omissions (E&O) coverage is high, clients sometimes have buyers’ remorse. A few months into a policy, they may contact another insurance agent for a better deal, then attempt to cancel the first policy. Shopping a midterm change can be an expensive and disruptive practice for insurance agents and brokers since many reputable markets will refuse to write a claims-made policy while another is still in force. In such cases, it is usually best to wait until renewal. Sometimes, though, a real estate agency enters into a new contract that has with coverage requirements its current insurer can’t meet, so it must find the coverage quickly. By understanding and explaining the material reason for a midterm renewal, an agent is much more likely to get a client a good midterm placement.
Are you working with another agent to get a quote for errors & omissions coverage?
In segments of the real estate industry, it may be routine for several agents to try to sell the same piece of property at the same time, but in the world of complex liability insurance, there is a decided disadvantage to the client to have several agents shopping the same piece of business. In most cases, a carrier will consider a piece of real estate E&O business just once. That means if the first insurance agent or broker fails to effectively explain the risk causing underwriters to reject the business or provide a very high quote, that market is blocked. Another, more savvy insurance broker, has no chance to use their expertise and relationships to make a better case for the client.
What does your agency do to keep your sales agents up-to-date on changes in your industry?
A good program of risk management can limit claims and improve a risk’s profile. One successful real estate agency holds mandatory monthly in-house seminars on topics like market changes, legal changes and handling risky transactions. It also encourages Realtors to take continuing-education classes.

At Burns & Wilcox our expertise becomes your expertise. Our marketing materials are designed to help you give your clients what they want to hear – yes to almost any hard-to-place-risk.

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