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Protect Your Commercial Real Estate Business with Professional Liability Insurance
In commercial real estate, others entrust you with their most valuable assets – their properties. Because the stakes are so high, professional liability lawsuits are common in this business. Whether your advice fails to meet a client’s expectations, you fail to document decisions or actions, or your client believes you didn’t act in his or her best interests, it only takes one real or perceived error to spark a costly legal battle.
If your small real estate business should ever face a lawsuit, the costs for a legal defense and possible settlement could be enough to put you out of business. But if you’re prepared with errors and omissions insurance, you can continue to focus on your business while your insurance company takes care of the legal action. Also known as professional liability insurance or E&O coverage, this type of insurance can provide a legal defense and pay for damages or settlements you may be ordered to pay, up to the limits of your policy. It can also protect you against unexpected liability if your work or advice for a client causes damages to a third party.
For example, suppose an employee of your commercial real estate agency fails to confirm a property’s zoning status, and the buyer later finds out that he can’t use the property he just bought for his business because it’s actually zoned residential. Your business could be sued because the buyer is stuck with a property he considers worthless. Professional liability insurance can provide you with a legal defense, help you fight your case in court, and pay any settlements or judgments awarded to the buyer.
What Professional Liability Insurance Covers
Business Insurance Now’s commercial real estate professional liability insurance policies can provide up to $10 million in coverage for:
- Defense in legal proceedings
- Damages payable to clients because of problems with the professional’s work or advice
- Third-party discrimination
- Punitive damages up to $250,000 (where insurable by law)
- Joint ventures as insureds
- Final adjudication language for fraud claims
- Spousal liability
- Personal injury offenses
- Competitive minimum premiums for various limit options
- Bi-lateral extended reporting period
- Follow-form excess coverage available
- Duty to defend
Please note that real estate professional liability policies typically provide coverage on a claims-made basis. This means that for a claim to be covered, the incident in question must have occurred while the policy was in force, and the claim must also be reported to the carrier while the policy is still active.
Contact Business Insurance Now for a Free Risk Assessment
To ensure adequate coverage, many commercial real estate professionals need help selecting the right professional liability policy and coverage level for their business. Contact the real estate insurance experts at Business Insurance Now for a free risk assessment to help you select the right professional liability policy for your real estate specialty.
Get a FREE professional liability insurance quote now!
Professional Liability Insurance Tips
- Professional liability insurance is generally issued on a “claims-made” basis. So, for a claim to be covered, the incident in question must have taken place while coverage was in force, and the claim must also be filed while the policy is still in force. If you let your policy lapse after a sale, and then you get sued, you won’t be covered.
- Use contracts to clearly specify the limits of your responsibilities to the client. Doing so can reduce the risk of a lawsuit and can help protect you against situations that aren’t covered by professional liability insurance.
- Strive to keep positive relationships with your clients. But even if you do, remember that even the best client relationships can go bad when big money is involved. The risk of a lawsuit is ever-present in the real estate industry, so don’t do business without professional liability coverage.