Some agents have asked if their errors and omission insurance covers liability if a client claims they contracted coronavirus while engaged in a real estate transaction.
“The answer to that question is that getting the coronavirus is a bodily injury issue and bodily injury is not normally an E&O coverage. It’s typically handled by a firm’s general liability insurer, however, some E&O policies (including Pearl’s) have the ability to add contingent bodily injury and property damage coverage at various levels,” said Lisa Scoble, vice president of Program Business at Pearl Insurance, one of PAR’s Preferred PARtners.
“If one of our insured agents already has that coverage added and their general liability carrier will not respond to one of these claims, the claim should be submitted to the carrier for consideration,” she said. “We do not add this coverage mid-term and there are underwriting requirements one must meet before coverage can be added.”
A firm may qualify to add bodily injury coverage to their E&O policy through:
- A contingent bodily injury and property damage endorsement for all real estate services which can be added for a fee. The firm must meet with the carrier’s underwriting guidelines.
- A contingent bodily injury and property damage endorsement for property management services can be added for a fee. The firm must meet the carrier’s underwriting guidelines.
- Open house and lockbox bodily injury and property damage endorsement – includes a sublimit.
Another exposure that real estate firms need to consider at this time is having agents working from home rather than in the office.
“This national trend is a breeding ground for fraudsters who prey on the real estate industry through social engineering schemes and phishing to ultimately commit wire transfer fraud,”she said. “Brokers and real estate professionals alike should adhere to strict online hygiene training, especially focused on how to identify phishing red flags, while practicing some easy risk management tips to avoid wire fraud issues.”
“A cyber liability policy is also a must today, whether added to an E&O policy or a standalone policy (or both),” she continued. “It’s crucial that business owners confirm that the ever-popular third-party wire fraud complaints are, in fact, covered in whatever policy they purchase.”
Jim Goldsmith, PAR’s outside legal counsel, urges Realtors® to be cautious. “If your actions may increase risks to you or your client, you should contact your broker and legal counsel to determine to how to protect yourself and your business.”
To learn more about Pearl Insurance options for PAR members, visit PARealtors.org/savings.