A recent report from the Tennessee Department of Commerce and Insurance revealed that some Realtors in the region failed to follow state guidelines.
One local real estate company failed to maintain its errors and omissions insurance, which is required by state law. As a result, the Realtor was fined $1,000 and was forced to surrender their license.
Local Realtors explained that the insurance is viewed as the cost of doing business, as well as a means of protection for buyers and sellers should a lawsuit arise. The premium for the insurance in the area is close to $500 for two years.
One broker told TriCities.com that E&O insurance is like car insurance in that, even if it isn’t required, it’s something every broker should have.
“[The insurance companies] pay the lawyers they straighten out the mess,” local broker Jason Johnston told the news source. “They help the consumers recoup any damages throughout the legal process.”
Johnston further explained that a common type of claim covered by the insurance is a Realtor’s failure to disclose a defect in a home, which can later prompt a lawsuit from a buyer.
