Real estate industry insurance, also referred to as errors and omissions insurance, can be a lifesaver for a real estate professional. Here are a few scenarios that this type of insurance can cover.
Transcribing Errors
Information can be incorrectly transcribed between documents, resulting in disastrous mistakes. Writing the wrong digit in a purchase and sales agreement can result in a substantial loss of profit for a client and at the same time cost a buyer much more than he or she intended to spend.
Omissions of Information
A busy real estate broker may forget to inform a client of information that significantly impacts the value of a property in a negative way. For example, a broker may forget to mention that a metal recycling plant is being built a block away from a quiet residential community, negatively impacting a house’s value.
Misunderstandings
A client and a real estate agent may have a misunderstanding that isn’t clearly illuminated until after documents have been signed. For example, a buyer may misunderstand that he or she cannot move into a property until a certain date, leaving him or her in a bind for housing in the meantime.
Mistakes and omissions happen in real estate due to the sheer volume of information being exchanged. It is important to have errors and omissions insurance to protect yourself from these professional issues.
