In business transactions, it’s the details that count—whether you’re buying a used car or negotiating a corporate merger. In the real estate world, that means—above all—making sure you disclose what you know or discover about the property or land your client is interested in selling. And it’s not just disclosure that counts, but the adequacy of that
disclosure. Housing inspector and syndicated columnist Barry Stone summed up disclosure very succinctly in a recent article. “Transfer disclosure laws consist of complex, legalistic verbiage, but in essence they are quite simple,” wrote Stone. “Basically sellers and agents must disclose whatever they know that could be of concern to a buyer.” If you forget or neglect to disclose something, you could be facing a lawsuit from an unhappy buyer. Here are three steps you should take to help stay out of trouble.

http://hsainsuranceservices.com/cms/Disclosure%20-%20HSA%20VOSCO[1].pdf

YOU OWE IT TO YOURSELF AS A REAL ESTATE PROFESSIONAL.   Your a professional, your clients have high expectations of you as a professional. Most clients would rather work with someone who takes their profession seriously and purchases insurance to protect themselves and their clients.

IF YOU DROP COVERAGE NOW, IT WILL BE AS THOUGH IT NEVER EXISTED.  Errors & Omissions policies are claims-made policies, meaning that coverage must be in force at the time of the claim to be covered. So consider carefully the transactions you’ve recently been involved with. Even if your policy was active while you were working on the transaction, if a claim is brought against you after you’ve let your coverage lapse, it won’t be covered by that policy. Keeping your coverage is the best way to protect yourself against future claims.

INSURANCE PROTECTS YOUR ASSETS.  Today the average cost of a claim against a real estate firm is in excess of $10,000 when the plaintiff receives payment.  But don’t forget, even frivolous claims cost you time and money to defend yourself.

WHO WILL BE WITH YOU IF A CLAIM IS BROUGHT AGAINST YOUR FIRM?  You don’t want to be navigating these waters on your own.  Your insurance carrier’s claims department will match you up with an attorney to defend your firm.  Many insurance carriers offer pre-claims assistance to help you deal with an issue or problem before it becomes a claim.

Because most E&O insurance policies are written on a claims made basis, making the decision to not renew this coverage because business is down can be disastrous to your firm’s financial future.  This would create a loss of coverage for your prior transactions.

We encourage you to read the “What is a Claims-Made Policy” on the E&O FAQ page of our website before making a decision that could affect your firms financial future.