Errors & omissions (E&O) insurance is the safety net that protects real estate professionals when a client claims a mistake cost them money. Most agents never think about it — until they need it.
What E&O typically covers
- Negligence claims — allegations that you failed to exercise reasonable care in a transaction.
- Misrepresentation — a buyer or seller claims you provided inaccurate information.
- Failure to disclose — disputes over property condition or material facts.
- Paperwork and process errors — mistakes in contracts, deadlines, or documentation.
- Legal defense costs — E&O often pays for your defense even when a claim is unfounded, which can be the most valuable part.
What E&O usually does NOT cover
- Intentional wrongdoing or fraud.
- Criminal acts.
- Discrimination or fair-housing violations (often excluded or handled separately).
- Claims outside your licensed real estate activities.
Policies vary, so the exact coverage and exclusions depend on your brokerage's plan. The takeaway: E&O protects you from honest mistakes, not from cutting corners.
Why who pays for it matters
Some brokerages bill E&O to the agent — a monthly charge or a per-transaction fee on every closing. Across a busy year, that adds up. Others cover it as part of the brokerage. At Bear Team, E&O is covered by the brokerage, not deducted from your commission per file (here's the full fee picture).
This is a general overview, not insurance or legal advice. Coverage, limits, and exclusions differ by policy — review your brokerage's specific E&O coverage.
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