September 7, 2018
Real estate professionals can face a variety of risks on a daily basis, especially when it comes to handling housing deals for clients. If you’re a real estate professional and you like to stay competitive in the industry by playing different roles, such as agent, broker and appraiser, then you’re even more likely to face risk.
Even if you’re seasoned in the world of real estate, errors, even small ones, are always a threat and can lead to trouble in terms of your reputation, client base and bottom line. In this case, it’s crucial to invest in real estate insurance that offers a full circle approach to safeguarding you from legal issues. Also known as Errors & Omissions coverage, this layer of protection can keep you safe from a wide variety of mistakes made on a daily basis by those in the real estate field. Let’s take a look at some examples of why this is an important thing to have.
Failure to Advise
Sometimes certain pieces of information are glossed over or forgotten entirely. In the case of failing to advise or disclose specific information to a buyer, they can turn around and make a claim against an agent. Even if the agent wasn’t privy to the information it’s still their job to know in the first place. With E&O insurance however, agents can find themselves fully protected when it comes to defense fees in court, which makes one less thing to worry about during a stressful litigation period.
This is another instance in which E&O insurance plays a vital role in keeping you safe from errors that aren’t necessarily your fault. Transaction errors are not too common, but do happen, and can still result in a claim made against an agent by a disgruntled client, especially if a sale has fallen through.
Real estate agents sometimes offer property manager-type services to their clients. When a tenant is faced with eviction they may do anything in their power to stay put. If this is the case, an agent has to be overly meticulous in how they handle this because any mistake, even something extremely minor, can have huge legal ramifications later on.
In a real estate transaction, closing the deal is arguably the most important step. It ties things up and puts to rest all the stresses of the whole process for both agent and client. When lending standards are raised, however, closing can become a challenging aspect of the transaction. Agents may be hit with lawsuits if anyone involved views them as responsible for hiccups in the process. Not only can this result in reputational damage, giving your practice a bad name among potential clients, the expense of paying legal defense fees can dig deep into your bank account.
About Associations Liability Insurance Agency (ALIA)
The ALIA Team (part of the Riverton Insurance Agency Corporation), specializes in helping real estate professionals find the affordable and comprehensive coverage they need, without the hassle. ALIA dates its roots to 1991 with the founding of FREA, Foundation of Real Estate Associates. In 2013, ALIA was created to work with multiple insurance companies thereby broadening the portfolio of products to customers. In 2017, ALIA was purchased by Riverton Insurance Agency Corp.