What is Real Estate Professional Liability Insurance?
Real estate brokers can represent buyers, sellers, individuals and companies. But because they operate in a highly regulated industry, they can be exposed to a range of liability exposures:
Undetected pest damage, sewage, or septic problem
Error in home inspection; undetected problems with sewer or septic system, foundation, ceilings, roof, leaky pool, etc.
Failure to detect intentional misrepresentation by seller
Error in zoning interpretation
Error in comparative market research report
Undetected pollution (in soil, in well water, etc.)
Inadvertently offered bad advice
Bank mortgage error
Overlooked property easement
Breach of confidentiality
Broad coverage for professional services associated with the real estate industry, including coverage for firms involved in residential sales, commercial sales/leasing, property management, consulting, appraisal and mortgage brokering
First Dollar Defense
Fair housing coverage
Environmental hazards coverage
Real estate development services coverage
Contingent bodily injury and property damage for renovation services
Shared expense deductible
Why it’s smart to have Real Estate Professional Liability Insurance
With a plan to sell his chain of local restaurants, the owner inflated its profit-making ability by overpaying in taxes for several years. A couple purchased the business, but when the business went bankrupt, they hired a forensic accountant who discovered the former owner’s deception. The couple sued the business broker for negligence and misrepresentation, claiming damages of $347,000.