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Real Estate Professional Liability

Real Estate Professionals are relationship managers between buyers and sellers of property. If anything in that relationship or transaction goes wrong, they may find themselves facing a lawsuit. Claims against Real Estate professionals grew faster than in any other business segment between 2006 and 2012. ECC understands that while the agent may be committed to their customers, the customers may not always return the favor. The agents financial security can depend on how well protected they are from a lawsuit or claim.

There is no question the internet has changed the way Real Estate Professionals do business. As their business continues to expand into the Internet, so does the threat of network and security exposure. Threats and losses from network and information security are major risks. Agents can be held personally liable for lost or stolen information. ECC has solutions for the Real Estate Professional.

Our solutions are designed to your individual needs. We tailor coverage to each firm’s needs, and provide consulting to agents on important risk management issues. The experts at ECC are ready to extend their services to help you analyze and secure the best possible coverage to fit your client’s firm and protect your company.

Common Sources of Real Estate Claims

  • Lack of attention to paperwork
  • Mistakes in formulas or payment provisions
  • Failing to reconcile documents when the deal changes mid-stream
  • Failing to identify all the parties or investors
  • Failure to disclose all facts, costs, and terms
  • Failing to provide for real estate tax payments in a lease or deal

Eligible Risks

There are solutions for both small and large professional Real Estate firms independently owned and operated providing services to third parties.  Coverage is available to real estate professionals performing residential, commercial, leasing and incidental property management transactions

Claim Examples

A real estate agent represented sellers in the sale of their residential property.  A few months after the sale, there was a heavy rainstorm and the buyers discovered a severe leak that was undisclosed and previously painted over.  The buyers sued the sellers and their real estate agent, as the disclosure document did not mention any water intrusion issues. The claim was settled for $18,000

Prior to the sale of the property, an agent received a call from a neighbor complaining that a waste dump on the subject’s property was damaging his property. Although the agent provided this information to the buyer’s agent, the buyer alleged they never received this information prior to closing. The buyer brought a claim against the selling agent for failing to advise them of the waste dump.

The real estate agent/broker represented the buyers in the purchase of a newly constructed home.  After closing, the buyers discovered defects in the property arising from water intrusion. The buyers filed suit against the selling agent for negligence and breach of fiduciary duty. The claim settled for $35,000.

Agent Sales Tips for Real Estate Professionals

The best way to sell E & O insurance is to start a conversation with your client or prospect.

Sales Prospecting Questions

  • What are the biggest challenges facing your organization today?
  • If you were in charge, with time and unlimited resources, what would you change in your organization? 
  • What do you value in your broker? 
  • What does your current broker do well?
  • In what areas could your current broker improve?
  • What changes could your service providers make to improve your working relationship with them and your entity?

What areas do you think offer the greatest opportunities for your broker or any service provider to do an even better job of serving you?