Real Estate E&O

Real estate errors and omissions (E&O) is professional liability insurance tailored to real estate agents, brokers, property managers, and appraisers. It responds to claims that a professional's negligent act, error, or omission in a real estate transaction caused a financial loss, most commonly negligent misrepresentation of a property's condition, failure to disclose a known defect, missed contract deadlines, inaccurate square-footage or valuation, or breach of fiduciary duty to a client. Nearly all real estate E&O is written on a claims-made form, meaning the claim must be reported during the active policy period.

For an independent agent or small brokerage, this coverage is essential because disclosure and misrepresentation disputes are among the most frequent lawsuits in the industry, and they involve pure economic damages that a general liability policy does not cover. In many states, brokers are contractually or legally required to carry E&O before they can be licensed to a firm. Because the policy funds legal defense even for meritless claims, it protects a small operator from the disproportionate cost of litigating a dispute that may hinge on what was said during a showing.

A practical nuance: standard forms often exclude or sublimit higher-hazard activities such as appraisals, property management, mold, and pollution, and coverage for the agent's own investment properties is frequently restricted, so buyers must match the form to their actual practice. When changing carriers, preserving the retroactive date through prior acts coverage keeps older transactions insured. Franchise brands may mandate specific limits and named-insured wording.