Property Insurance

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As a real estate professional or a broker involved in the property market, you may be committed to your clients. However, what if you advise your client to invest in a particular property deal which turns out to be wrong? You might be sued by the client. If God forbid, the verdict goes against you, be ready to compensate the other party. In such a situation, you would have to pay compensation along with legal expenses in defending yourself in the court.

Here, you could get some respite if you have errors and omission insurance policy. When you have errors and omission insurance (E&O) or professional liability insurance policy, the insurance company will pay for any judgement against you up to the limit as specified in the insurance policy. It means errors and omission insurance policy in real estate would help you by offering the below coverages=

  • Pays claims which may arise due to omission, errors or negligence on account of your duties as a real estate professional
  • Pays claims which arise during the policy tenure

Professional liability insurance in real estate can help in paying for lawsuits which might include lawyer fees, court costs, settlements, judgements, etc.

Who should buy professional liability insurance?

  • Real Estate Agents
  • Real Estate Brokers
  • Property Managers

While professional liability insurance offers comprehensive coverage, there are certain conditions which are not covered under the policy. For instance, claims which arise due to criminal acts conducted by you, or claims which arise due to loss or damage you cause to third-party’s property, etc.; will not be covered under errors & omissions insurance policy.

In addition to this, errors & omissions insurance policy comes with a deductible clause. In insurance field, the deductible is the amount that a policyholder is required to pay at the time of claim. The insurer would cover only that amount which is above the deductible limit.

Read more: What is Errors & Omissions Insurance?


K.S Real Estate was a pioneer name in the realty sector. Since its inception, the company has been acting as a connecting link between tenants and landlords. With its offices in different parts of India, the company is imparting various services, like helping people in getting an accommodation on rent, preparing rent agreements, etc.

Last year, Rajesh Singh, a software engineer, contacted K.S Real Estate to find a suitable house in Pune for rent. As Rajesh had recently shifted to Pune with his wife and a daughter, he was looking for proper accommodation with all the good facilities.

K.S Real Estate found an apartment for Rajesh as per his needs, who shifted in the new apartment in one week. The real estate company took care of the paperwork. However, only a month was passed, when the second owner of the house asked Rajesh to vacate the house. The second owner argued that the apartment was given on rent without consulting him. Now, he wanted to shift into the apartment with his family.

Rajesh approached K.S Real Estate who investigated the matter and found that there were two property holders of the same apartment and the permission of both the owners was required to give the apartment on rent. However, K.S Real Estate took the permission of only one owner and due to which Rajesh had to vacant the house.

Read more: Who Should Buy Errors & Omissions Insurance?

It was a great financial setback for Rajesh who just shifted to the apartment and also got his daughter admitted into a nearby school. Now, Rajesh had to do the house hunting again which also meant changing the school of his daughter.

Rajesh filed a case against K.S Real Estate for the negligence. The verdict was given in favour of Rajesh, and the court asked the real estate company to pay compensation of Rs 20 lakh to him. As the real estate company had errors and omissions insurance policy, it approached the insurer for the claim settlement. Here, the insurer found the claim to be valid, and therefore, it agreed to settle the compensation. The insurer paid compensation to Rajesh and also covered the legal expenses incurred by K.S Real Estate in defending itself in the court.