Mistakes often have a consequence. Most especially when you are in a legal business scenario involving investments of other people's finances. In the real estate industry, professionals who work for said sector run the risk of committing an error or omission in the performance of their duties and obligations.
When an error or omission is made that causes financial harm to another, employees in the real estate market face lawsuits brought by dissatisfied customers.
Employees of the real estate market are vulnerable to a drop in their finances due to the costs incurred by legal actions in their defense when facing such lawsuits. Legal actions and services cost money. But today, insurance companies offer insurance not only for items sold by real estate workers, but also to save them from a sudden financial crisis.
Errors and Omissions Insurance Coverage exists to protect real estate professionals from losses due to lawsuits filed related to an error or mistake made in line with job responsibilities. In short, the insurance company pays all the costs of the legal action in defense of the insured.
The benefit of having an E&O (as it is popularly called) generally includes payments for claims filed for an error, omission, or any form of negligence with respect to the insured's duties as a real estate professional. All defense expenses in legal actions for claims within the policy period are also covered.
Common exclusions from Errors and Omissions Coverage are claims resulting from dishonest or criminal acts committed by the insured, claims related to contaminated property, claims against the insured for any bodily injury or death of another person that has occurred, and claims that arise from damage to someone's property.