Professional Liability (E&O) Insurance (2024)

How often do brokers or agents incur a claim?

According to NAR, 1 in 5 Texas Realtors will incur an E&O claim at some point in their real estate career. Even the most experienced and well-intentioned real estate professionals encounter claims. Protect you and your business before a claim happens!

Yes. Errors and Omissions (E&O) insurance is an industry synonym for Professional Liability insurance. The terms are used interchangeable.

Do clients require you to carry business insurance coverage?

Many commercial and residential clients would not consider working with a real estate professional that doesn’t carry business insurance coverage. Experienced clients understand that if there is a problem with the transaction, they need to be working with not only a licensed professional, but an insured professional.

E&O insurance is recommended by TREC, TAR and NAR but not required for all brokers and agents in Texas. However, if a designated broker owns less than 10% of a brokerage entity they are sponsoring, they are required by TREC to have $1M in E&O insurance.

The more active your real estate business is and the more revenue your business earns, the more you will pay in E&O insurance. Other risk variables are considered too. For $1M in liability coverage, the average agent, broker or company that earns $30k in commission revenue pays about $400 per year. The average agent, broker or company that earns $100k annually pays about $900 annually for E&O Insurance. The average agent, broker or company that earns $250k pays about $1,500. The average agent, broker or company that earns $1M pays about $2,900.

How much professional liability coverage do I need?

It depends on your transaction types and transaction volume. Our most popular option is $1M in coverage. Remember, most real estate claims quickly incur a significant amount of attorney defense costs, typically amounting to more than six figures. Get an instant quote right on our website!

E&O insurance is typically purchased for a one year term. This means your cost of insurance is not subject to change until renewal the following year. If you need to cancel your policy, you can do so anytime on a prorated basis. Lastly, all of our policies include a 100% money back guarantee within 14 days of purchase.

I am a real estate broker/agent who also does property management, how do I make sure my policy covers both business activities?

Complete the online quoting process for the business activity that you are most active in (based on gross revenue). Once that quote is generated online, call (800) 598-5598 to speak with our team. We will manually add the second business activity, which typically costs around 10% in additional premium.

I’ve never had a claim, why do I need this type of insurance?

Many real estate professionals get sued for situations in which they are 100% innocent. Unfortunately, they often get sued by the clients they trust most including friends and family. We issue policies that cover the legal defense costs up to your policy limit in all situations. The minimal cost of coverage per month far outweighs the disruption of a lawsuit to your day-to-day real estate work. Many of our online competitors have minimal defense cost coverage included in their policies, so be careful!

Will I be notified about my policy renewal?

Yes, our system will keep track of your renewal date so you don’t have to worry about it! If your policy is eligible for renewal, you will receive a billing notice 60-90 days prior to the new policy’s effective date.

We strongly recommend adding general liability insurance coverage to your E&O insurance policy. The two types of coverage help maximize your protection. Additionally, by bundling them together – you can save 10% or more!

I am a broker/agent that owns investment properties. Will these properties be covered?

If you own investment properties in addition to providing real estate services, we recommend you call us before completing an instant quote on our website. Our standard policies do not include coverage for your investment properties but our team can provide other policy options for your particular situation.