The Most Common Commercial Real Estate Errors and Omissions Claims
Claims made due to errors and omissions (E&O), or professional liability issues, are some of the most common claims amongst the commercial real estate industry. Last month, we reviewed the basics of commercial real estate errors and omissions insurance, noting that it only takes one small mistake for your client to be facing a potentially costly legal debate. While the only way for your clients to truly protect themselves financially from these claims is with the right Errors and Omissions insurance policy, knowing what E&O claims they could possibly face could help them reduce their exposure to risks.
One of the top E&O claims made against commercial real estate agents is an accusation of, or existence of dual agency, when the real estate brokerage and the individual agent is representing both the seller and the buyer. Here’s a brief list of some of the other most common commercial real estate errors and omissions claims.
Environmental Issues. In addition to pollution around the property, buyers are concerned with issues such as asbestos, lead-based paint, and groundwater contamination. If a real estate agent fails to disclose information regarding these environmental factors, they could very well find themselves facing a lawsuit. To limit their environmental liability, commercial real estate agents should stay educated and know what the common hazards are in their area.
Americans with Disabilities Act. Claims of ADA violations have been brought against commercial real estate brokers who failed to do what’s “Readily achievable with reasonable effort and expense” to serve clients with disabilities. It’s imperative that your clients educate themselves about their responsibilities under the ADA.
Owned Property. Many commercial real estate professionals get involved in transactions involving property that they maintain an ownership interest in. This creates a conflict of interest, created by their ownership and subsequent rendered services for their owned property.
These are just a few of the most common commercial real estate errors and omissions claims your clients may face. PLRisk Advisors is a leading wholesale insurance brokerage covering the professional liability market. Our team of seasoned professionals has the depth of knowledge to help our agency partners secure the best quality of coverage for their clients.We provide Professional Liability, or Errors & Omissions, insurance products for a number of professionals, including both commercial real estate agents and residential real estate agents. Please contact us today for more information at (855) 403-5982.