Real Estate Brokers VS. Realtors: The Difference in Insurance Coverage Needs
Unfortunately, in the real estate industry, lawsuits are common. Unhappy clients are prone to filing lawsuits, particularly over mistakes or bad advice. Insurance products are necessary to protect any person in the real estate business. However, if you are a broker or an agent, your insurance options may vary.
What Brokers Need
Brokers are liable for themselves and their agents. On one hand, all brokers need errors and omissions coverage. While agents may also have E&O coverage, the broker is still legally liable for the agents behavior. Also, if a broker has a building, he or she needs property insurance. Likewise, if he or she has agents, clients or guests visiting the office, general liability is important. General liability protects against property damage and injury.
What Agents Need
In general, real estate agents are liable for their actions, rather than the actions of others. If you are an agent, then you are more likely to face a lawsuit based on advice that you gave, particularly when your advice doesnt have the outcome the client hoped for. Most agents need errors and omissions insurance. This protects against lawsuits filed by clients.