What type of insurance is essential for real estate professionals?

Errors and omissions insurance, commonly known as E&O insurance, is essential for real estate professionals because it provides protection against claims of negligence or inadequate work. In the real estate industry, professionals face the risk of being sued for various reasons, such as failing to disclose important property information, violating fiduciary duties, or making mistakes in transactions. E&O insurance covers legal fees and any settlements or judgments that may arise from these claims, thereby safeguarding the financial interests of the individual or agency against potential liabilities.

In contrast, while having life insurance, health insurance, and property insurance can be beneficial for various personal and business needs, they do not specifically address the unique risks associated with real estate transactions. Life insurance is primarily aimed at protecting personal assets and providing for beneficiaries after death. Health insurance is intended for covering medical expenses related to personal injuries or health issues, and property insurance protects physical assets like an office building or equipment, but none of these provide the specialized coverage necessary for defense against claims of professional negligence inherent in real estate practice.