Errors & Omissions Insurance for Real Estate Professionals

Transcription

1 Errors & Omissions Insurance for Real Estate Professionals

2 Victor O. Schinnerer & Company, Inc. The Schinnerer Real Estate program was established in Long term partnership with CNA. Chosen by the NATIONAL ASSOCIATION OF REALTORS (NAR) for its members through the REALTOR Benefits Program

3 Professional Liability Consulting Services, Inc. Charter Member of Schinnerer s Elite Broker Network Over 3 Decades of Professional Liability / E&O Insurance Experience and Expertise Industry Recognized Expert & Preferred Provider of Professional Liability / E&O Insurance Call Today at or us at DennisS@plcsi.com

4 What Should I Know About E&O The Basics What? Who? When? Where? Why?

5 What is it? What is E&O insurance? What is an error? What is omission? Today s focus is Real Estate Professionals E&O

6 Who is it for? Who is Covered under a Real Estate Professionals E&O Policy?

7 Who is it for? Who? Real Estate Agents Real Estate Brokers Real Estate Personal Assistants. Appraisers Property Managers Leasing Agents Mortgage Brokers Auctioneers Real Estate Consultants/Counselors

8 When is it useful? When is E&O useful?

9 When is it useful? When a customer, buyer or seller, is unhappy with a real estate related transaction and threatens to make a demand or actually makes a demand.

10 Where is it useful? Where is E&O useful?

11 Where is it useful? Look for policies that cover acts or omissions that happen anywhere in the world. Typically, claims are made or suit is brought against an insured in the United States of America, its territories or possessions or Puerto Rico or Canada.

12 How are mistakes made? How do real estate professionals make errors and omissions?

13 How are mistakes made? How? Not documenting files Not focusing on details Not verifying information Acting outside scope of duties

14 How does it work? How does an E&O policy work? Defense Indemnity

15 Why have it? Why insure your Real Estate Business?

16 Why have it? Why? An insurance carrier will be with you during the claim process You may be required to carry it Attracts the best agents Sends a message to clients that you are professional

17 Why have it? Why? Staying continuously insured can reduce insurance costs Insurance protects your assets Protects your staff

18 What other types of insurance do I need? What? General Liability Commercial Auto Property Workers Compensation Health & Life

19 AY CLAIM TYPE Negligence Misrepresentation Fraud / Intentional Acts / Misconduct Breach Of Contract Breach of Fiduciary Duty Civil Rights / Fair Housing

20 AY PROBLEM AREA Contract Error Valuation Specific Performance Escrow Structure Investment Value Sewer / Well Water Infiltration Mold Title Issues

21 E&O Policy Specifics Coverages: Broadly defined Professional Services Duty to Defend Coverage for Innocent Insureds Coverage for Environmental Hazards Coverage for Discrimination

22 Coverages: E&O Policy Specifics Defense against licensing board complaints Public Relations Coverage Lockbox Coverage Network and Privacy Protection Open House

23 E&O Policy Specifics Exclusions (what isn t covered by E&O): Contractual Liability Bodily Injury & Property Damage* Pollution

24 E&O Policy Specifics Exclusions (what isn t covered by E&O): Sale of a business Value of a business or future value of property Insured vs. Insured Property Syndication or REIT Other interests, operations or activities Violation of Law

25 E&O Policy Specifics Specific Coverage Endorsements May Be Available to Address Other Exposures: Coverage for sale of owned residential property Coverage for properties constructed and developed by a related entity Employment Practices Liability + Discrimination

26 E&O Policy Specifics Specific Coverage Endorsements May Be Available to Address Other Exposures: Mold Coverage Non Profit D&O Coverage Extended Reporting Options

27 E&O Policy Specifics Insurance Carrier: Stability & highly rated by AM Best Risk management services Excellent Claims Service Attorneys who specialize in defending real estate firms

28 E&O Policy Specifics Insurance Carrier: Experience with handling real estate E&O claims E&O claims specialists, rather than generalists Pre-claims assistance

29 Avoid a Claim Document your files Know your limitations Do not misrepresent Use care in recommending others Watch your fiduciary duty Observe and document Disclose, Disclose, Disclose

30 Avoid a Claim Keep current with local, state, and national requirements. Keep current with continuing education. Exercise care with multiple offers, back-up offers, contingencies and dual agency.

31 Avoid a Claim Do not act as lawyer and do not give legal advice Do not act as anything other than a real estate professional Stick to what you know Use standard forms

32 Avoid a Claim Follow office procedures Disclose agency relationships Follow risk management guidelines, advice and tips from NAR

33 When a claim has been made Act on it immediately If you have errors and omissions insurance, involve your carrier

34 REALTOR Benefits Program Member Benefits: Special pricing 5% discount where allowable by law Risk Management Toolbox Claim scenarios, webinars, toll-free hotline, on-line library

35 What should I know about E&O? Questions

36 Errors & Omissions for Real Estate Professionals Dennis Supraner Victor O. Schinnerer & Company, Inc.