6 Best Real Estate E&O Insurance for 2023

Thang Truong
Thang Truong
Updated on:

Real estate agents bring people and the property of their dreams together. Whether it’s the perfect home, the perfect office space or a great investment, real estate agents are in the business of both selling property and selling themselves. After all, your clients place a great deal of trust in you. They like you. Surely, you don’t have a need for errors and omissions insurance?

Top 6 Providers of Real Estate E&O Insurance

These are our recommendations for realtors.

CoverWallet: Best for Comparing Online Quotes

CoverWallet is a national digital commercial insurance broker, specializing in helping small and medium-sized businesses find the best business insurance policies. They offer a simple and fast online quoting flow. Within 10 minutes, they will provide you with several quotes from leading companies to compare and choose from.

In addition, if you are new to buying business insurance, you can also reach out to their agents with any questions. Their agents are very knowledgeable and are very thorough in explaining to you everything you need to know to make the right decision to protect you and your business.

Victor Insurance Managers: Best for Discounts

Victor Insurance managers has paired with the National Association of Realtors to provide members with E&O insurance. They offer discounts for such members, plus discounts for continuing your education, use of home warranties, and for longevity (staying with them for three years, five years, or ten years). 

In order to purchase a policy with Victor Insurance Managers, you must submit an application. A broker or agent will then email you with a quote. It requests your NRDS ID, so we were unable to get a quote.

Insurance Bee: Best for Affordable Coverage

Insurance Bee sells insurance to small businesses, freelancers and independent contractors. They can give you a quote and you can purchase it online, thereby saving you a lot of time. 

You can also talk to an insurance agent if you’d like. You can pay either all at once or in monthly payments. You can change your policy at any time. They can offer you general liability, cyber insurance, and workers’ compensation insurance as well. 

They don’t insure every state, but if you’re a state they don’t insure, they can refer you to another carrier. 

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360 Coverage Pros: Best for Fast Enrollment Process

360 Coverage Pros is part of the Gallagher group. They include 360 Coverage Pros, CNA, EOforless, and NAPA (National Association of Professional Agents). 

They offer comprehensive and affordable insurance for real estate agents. Through their relationships with other companies, you can get discounts on NFL tickets, Target, Costco, movie tickets and more. 

You can get a policy online and be on your way in minutes.

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RISC (Rice Insurance Services Company): Best for Mandated Coverage

If you live in one of the states that requires realtors to carry errors and omissions insurance, RISC can help you out. They provide insurance for Alaska, Colorado, Iowa, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, New Mexico, North Dakota, Rhode Island, South Dakota and Tennessee. 

They offer coverage exceeding minimum requirements. All of their policies are guaranteed-issue if you have an active real estate license. 

CRES insurance Services: Best for Comprehensive Coverage

Cres insurance services offers some innovative features such as Open House and Showings coverage, which covers you in case of any mishaps while showing a home (dog bites, slipping on stairs, etc.)

They cover all of your real estate activities and include 25 free building permit history reports with your policy, so you can show them to potential buyers and thereby reduce liability. They even include pollution coverage, which most companies do not cover. 

After you put in your personal information, it takes you to a checklist of what kind of real estate sales you do. Sometime after that, they request your license number, so we were unable to get a quote from them. 

They don’t insure every state, though. 

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>>MORE: The 9 Best E&O Insurance Companies for Small Businesses

What is Real Estate E&O Insurance?

Errors and Omissions (E&O) insurance is another name for professional liability insurance. These days, anyone can be sued for any reason. Even if the lawsuit is groundless or frivolous, you still have to deal with the high cost of defending yourself in court. Errors and omissions insurance covers these costs. 

For a more thorough explanation of professional liability insurance, see “What is professional liability insurance? And its cost?”

Who Needs Real Estate E&O Insurance?

In general, real estate agents, real estate brokers, property managers, and real estate appraisers should have real estate E&O, or professional liability insurance coverage.

Most of your clients will be happy with their purchases. But what if something goes wrong? Real estate agents have been sued for failing to disclose defects in a property, for misfiling paperwork, or for breach of contract. There’s a great deal of emotions and money involved in the sale of real estate, and when things go wrong, clients can try to find someone to blame. 

Even if you work for a large real estate agency or brokerage firm, the firm should have some professional liability insurance, or E&O, to cover for the agents. However, as a real estate agent, you usually work for the firm as an independent contractor, and you could be sued and held responsible if something goes wrong in a real estate transaction. Having your own E&O insurance will protect you in such cases.  

>>MORE: The 9 Best Independent Contractor Insurance Companies

What does Real Estate E&O Insurance Cover?

Errors and omissions will cover court costs and legal fees in the event you are sued. Remember, you don’t have to be at fault for someone to sue you, but you still have to go to court. E&O insurance will cover you in the claims of:

  • Professional mistakes
  • Failure to deliver
  • Negligence

Real estate E&O insurance will help pay for court costs, attorney fees, administrative costs, settlements and judgments.

What doesn’t It Cover?

  • Fraud
  • Criminal acts
  • Bodily harm
  • Property damage that you cause
  • Polluted property

How Much does Real Estate E&O Insurance Cost?

It depends if you are a real estate broker or an agent or a property manager or a real estate appraiser. A real estate broker managing listings worth 10+ million dollars will need a different real estate E&O policy from the one that is obtained by a new real estate agent.

In general, the median cost for E&O insurance for realtors is about $55 a month. 

Based on the quotes we got from the 2 companies that we recommended above, the real estate E&O insurance cost is in the range of $30-60 a month.

Make sure you get and compare a few quotes before buying. You can easily compare quotes with digital broker like CoverWallet or Simply Business.

>>MORE: Errors and Omissions (E&O) Insurance Costs by Professions

>>MORE: Where to Get No Down Payment Errors and Omissions (E&O) Insurance?

Are Real Estate Agents Required to Have Real Estate E&O Insurance?

Some states require real estate agents to have their own errors and omissions insurance: Nebraska, North Dakota, New Mexico, Rhode Island, and Texas. But even if your doesn’t, it’s worth it to get a policy.

In states like California or Colorado where real estate E&O insurance isn’t required by the states, some clients might feel more comfortable working with agents who do.

What is Extended Reporting Period (ERP) in Real Estate E&O Insurance?

If you buy a real estate E&O insurance policy with extended reporting period (ERP), or sometimes called tail coverage, you will still have the policy coverage even after it is expired. For example, your real estate E&O policy ends on July 1, 2019 when you stopped working as a real estate agent. Its ERP is 6 months. If a client files a claim against you in Oct 2019, the E&O policy still protects you against the claim.

Real Estate E&O Insurance Claim Examples

There are several incidents that clients filed a claim against real estate professionals. Below are a few examples that a real estate E&O policy would protect the real estate professionals:

  • Agent describes a property incorrectly in a home listing
  • Agents fail to act with your fiduciary duties, ie. in the client’s best interests
  • Agents fail to mention a structural flaw in the house while advising their client to buy the house
  • Agents confirm to their clients the zoning of the house allow them to list the basement of the house in airbnb website to earn additional income. It turns out the property zone doesn’t allow short-term rental.
  • Real estate appraisers advise a higher valuation of a property because they fail to include another 4 recently sold properties in the neighborhood

>>MORE: E&O Insurance for Insurance Agents: Cost and Top 5 Providers

>>MORE: Notary E&O Insurance: Cost and Top 4 Providers

Last Thoughts

Emotions surrounding real estate sales can run high. Protect yourself and your business by purchasing errors and omissions insurance. Hopefully, you’ll never have to use it, but if you need it, you’ll be glad you have it. 

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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