Committing a mistake or an error is nothing new as this is essentially part of what makes us humans. Even so, if the mistake committed is part of our job, the liability falls on us as there are usually consequences that results from such errors. If the mistake fall on a professional or business setting which involves finances and investments, the consequences may be huge. Of course, when this happens, the person involved and possibly the colleagues involved will be facing lawsuits from unhappy clients.
Real estate is a very serious industry as professional working in this particular sector has certain duties and obligations and thus faces the risk of error or omission in many of their deals. When such is committed, there is a potential to cause financial harm to another. Their liability towards the mistake they make means they will likely be subjected to lawsuits. Real estate is vulnerable to downfalls and agents working for investors should be knowledgeable of the market. If financial losses are incurred, the agents themselves risk of facing lawsuits.
When you handle or deal with finances, it is vital that you properly insure yourself with Errors and Omissions Insurance. Having errors and omissions insurance coverage means you will be protected from loss due to lawsuits filed against you that is related with a mistake or error you have made relating to your job’s responsibilities. In other words, if you are properly insured and the terms of the lawsuit falls under your E&O Insurance Policy, then the insurance company will pay for all the expenses incurred within the legal actions in your defense.
Of course, the main advantage of properly insuring yourself with Errors and Omissions Insurance is that claims that are filed under error, omission, or neglect of duties of the insured that occurs within the policy period are covered. All expenses involving the legal actions shall receive payments. In real estate, the exclusions to E&O are: claims resulting from dishonest act or possibly criminal act committee by the insured; claims involving polluted property; claims that result from damage to another’s property; and claims by the insured doing bodily harm or death towards another.
As with any other type of insurance policies, Errors and Omissions Insurance coverage has liability limits. Of course, the limitation depends on the E&O insurance policy acquired by the insured from the insurance company. In fact, some insurance companies allow more inclusions than others over certain policies. For this reason, if you are involved in such a profession where Errors and Omission Insurance will prove useful to you, it will be in your best interest to acquire one as this will essentially be your security measure against lawsuits. Lawsuits happen every now and then so surely you would not want to get into a lawsuit without any form of protection.