What does Errors and Omissions Insurance cover?

Errors and Omissions Insurance, often referred to as E&O Insurance, is specifically designed to protect professionals, including real estate agents, from legal claims arising from professional mistakes or negligence in their work. This type of insurance provides coverage for claims that may result from errors in the services provided, such as failing to deliver a required service, providing incorrect advice, or other mistakes that could harm the client’s interests.

The insurance covers legal costs, settlements, and judgments related to these professional errors, which can help mitigate the financial impact on an agent facing such claims. This type of insurance is critical in the real estate field, where agents must ensure they fulfill their contractual obligations and provide accurate information to their clients.

In contrast, options that discuss fraud-related claims, general liability claims, or all damage claims do not accurately capture the specific scope of Errors and Omissions Insurance. Fraud-related claims pertain to intentional wrongdoing, which E&O coverage typically does not address. General liability insurance is a different type of coverage that generally protects against bodily injury or property damage, rather than professional service mistakes. Lastly, coverage for all damage claims is overly broad and not aligned with the specific focus of E&O Insurance, which is on professional errors rather than any type of damage.