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Errors and Omissions Insurance

Do we really need one? Is a 100% Commission Broker compromising on insurance? It all depends on the brokerage approach. There is no free lunch, if its 100% commission then the revenue source has to come from somewhere and the costs have to be effectively managed. E&O is a cost. When the revenue is constrained, E&O coverage may be reduced to lower costs.


But what exactly is Errors and Omission’s Insurance (E&O) and what does it entail? Errors and Omission’s insurance is to real estate agents what car insurance is to drivers. In the unlikely event that you are named in a lawsuit, an E&O Insurance claim will be filed. The E&O provider will provide legal representation on your behalf and pay any settlements up to the specified amounts in your policy. Note that the provider will always have exclusions and that is why it is very important to read those exclusions of every 100% commission broker's E&O policy.


At STANFLES REALTY we provide the highest rated insurance available on the market. While many other brokers buy discounted policies in an effort to trim costs, we are more focused on the exclusions and are focused on getting policies that adequately protect our agents. Our E&O Insurance provider has been an A.M. Best rated “A” insurer for many years.


Of course, our policy continues to offer coverage for agent-owned properties, all sale types, and provides $1m in protection. But one important note is that no E&O covers Agent purchases. If any broker tells you they cover Agent personal purchases and E&O allows it, ask for the exclusion and read it over. You will realize the Broker does not know what they are talking about.


Questions to ask potential brokers:

  1. What is the policy limit?

  2. What is the deductible?

  3. Is agent-owned property covered?

  4. What are the exclusions?

  5. What is the insurers rating?

When it comes time to select your new broker, it is extremely important to look beyond the surface. While fees and fancy offices can distract you from the true costs of doing business, be vigilant in your investigation of 100% Commission brokers.


STANFLES REALTY is the GOLD standard in 100% Commission real estate brokers in California. Do not hesitate further, speak to our PhD Broker and learn Marketing strategies and Consumer Behavior so that you can excel in your Real Estate Business today!

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