What insurance types are commonly required by brokers for their licensees?

Brokers commonly require their licensees to carry errors and omissions insurance and automobile liability insurance for several reasons that align with industry standards and risk management practices.

Errors and omissions insurance (E&O) is essential for real estate professionals as it protects them against claims of negligence or inadequate work. In the real estate field, licensees often handle significant financial transactions and provide essential advice to clients; therefore, they must safeguard themselves against potential lawsuits arising from alleged mistakes or failure to fulfill their duties. Having E&O insurance provides not only legal protection but also peace of mind for both brokers and agents.

Automobile liability insurance is also important since real estate professionals frequently use their vehicles to conduct business, such as meeting clients or showing properties. If an agent is involved in an accident while driving for real estate purposes, having this type of insurance protects against potential liability claims that may arise from bodily injury or property damage caused in the course of their work.

While other forms of insurance, such as health, life, or workers' compensation, have their own significance, they are not typically mandated by brokers for the purposes of real estate transactions and license maintenance. The focus is primarily on those types of insurance that directly relate to the risks faced in the practice of real estate, which