Real Estate Professional Liability Exposures

In any industry, it’s important to keep your clients happy. Having satisfied clients ensures that they will likely be returning customers, and it keeps your business’s reputation clean and reduces the risk of professional liability claims, which could easily destroy your business. Here at Axis Insurance Services, we are one of the nation’s largest independent firms writing Commercial Real Estate Errors & Omissions insurance, and because of this we have a wealth of experience in creating customized solutions to protect those in the industry from risks. Protect your operation with a personalized Commercial Real Estate E&O policy and familiarize yourself with the most common professional liabilities for your sector.


Perhaps the most common professional liability in the real estate sector, malpractice suits have the potential to devastate you financially and reputationally. Malpractice suits can arise due to a variety of reasons, with one of the most common being breach of duty when a client feels that you have not been acting in his or her best interest. Negligence is another common one; if you do not disclose information that the client feels is relevant, you could also be found liable.

Independent Contractors

Many real estate operations make use of independent contractors. This is not a problem in and of itself, but Insurance Journal has reported that many are unaware of whether their policy covers contractors at all, or whether they are covered as an employee or the insured. This ambiguity could easily lead to a lawsuit, particularly if the claimant assumes that the contractor was representing the insured when he or she was in fact not. Thoroughly screen contractors before hiring them, and make sure that everyone is clear on the contractor’s duties and insured status.

Not Protecting Clients’ Data

In this increasingly digital age, cyber attacks are more common than ever and could cause more damage than ever. As a real estate company, you likely keep your clients’ personal information stored on your database, which could include bank account information, routing numbers, credit card information, insurance information, Social Security numbers, their addresses, and more. If your business is breached your clients will likely hold you responsible for failing to protect their data, which is why it is crucial for you to protect your network.

Environmental Hazards and Property Defects

This can easily go hand-in-hand with the previously mentioned failure to document. If there is a potential hazard in the property such as asbestos, contamination, lead-based paint, unclean vents, vermin, or other environmental hazards, if they are not taken care of or the clients are left uninformed then you could find yourself facing a lawsuit. Understand the most common environmental hazards (both for residential properties in general and for your specific area), thoroughly inspect all properties before making sales, try to take care of problems before turning the property over to the client, and always keep the client informed.

About Axis Insurance Services

At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.

errors & omissions, professional liability insurance, real estate, commercial real estate, E&O, errors and omissions insurance, Insurance Articles, professional liability

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