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What Real Estate Agents Should Look for in Liability Insurance

Written by Posted On Tuesday, 18 July 2017 13:45
What Real Estate Agents Should Look for in Liability Insurance

Real estate agents play an important role in helping families find homes. In most cases, they try their best to ensure that the clients get the best properties for their needs. However, sometimes problems may arise with the property leading to litigation against the agent. It is not possible for the real estate agent, in spite of the most effective due diligence and years of experience, to establish every flaw in the property. Sometimes, the agents may not even have a duty to find the particular flaws. Nevertheless, this does not stop them from being sued for all manner of issues. In this case, is important for them to have liability insurance. There are various issues that the agent should for in that business insurance package to ensure that they are fully covered.

 

Errors and omissions insurance

It may be difficult for real estate agents to be 100 percent thorough in their checking. Human error can account for some of the errors and omissions that occur in the course of professional work. It is, therefore, important for an agent to look for the insurance company that can offer packages that are tailored according to his needs. For instance, there are agencies that have programs that are meant for appraisers and agents. These can help meet the claims that may in arise from that line of work. The insurance companies are able to anticipate the needs of the agents by hiring and consulting with professionals in the field. As such, the insurance firms will have the expertise of experienced real estate agents who can give their input on the needs of the profession. In this manner, all sorts of potential claims are analyzed and solutions developed. This means that the real estate agent will not lack a program that can meet his or her needs.

 

State endorsement

State governments across the country understand the importance of liability insurance for professionals. As such, the real estate agent should always look for insurance packages that are endorsed by the state. This can help ensure that the agent is receiving quality coverage that can be helpful in times of litigation. There are various incidences that can be used to illustrate how a real estate agent can be sued even when he is not liable. For instance, there are customers who require strict disclosure about the property they are buying. In a hypothetical situation, it is possible that a person may have been grisly murder in a particular apartment. Such ghastly occurrences often discourage the buyers from those houses. If the seller does not disclose that information and the real estate agent is not able to find out before the sale, he can be sued by the seller. Additionally, if there were structural problems with the property and the owner does not disclose them, the buyer can sue the agent. Such court cases can result in legal fees, waste of time, and damage of reputation. With liability insurance, the agent can avoid such losses in advance.

 

Umbrella coverage

The real estate agent can also opt to get an overall insurance cover. This can help overcome the limits imposed by the liability cover. If an agent deals with high end property, it is possible that the liability limit which can range between $500,000 and $1 million can be exceeded. This calls for a cover that can go above the limits. Ideally, if an agent is sued for $1 million and the limit of the liability cover is $500,000, the umbrella cover can pay for the balance.

 

Real estate agents are exposed to various risks in the course of their work. Thankfully, insurance exists to mitigate against such risks. In case claims are brought against the agents for the work they have done, the insurance cover can pay the damages sought so as to avoid excessive financial loss for the professionals. The coverage is also important as it helps to ensure the agent does not lose reputation in the business.

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Lindsey Patterson

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