Large real estate firms form the backbone of the industry—in 2013, the largest companies collectively earned over 9.9 billion dollars in revenue. Hundreds of other agencies earn over a million dollars a year from commissions, and provide jobs for thousands of people. However, larger companies also face larger risks, and the price of mistakes is high. Real estate errors and omissions insurance can help protect the largest companies from trouble.
Mistakes and Missteps
Even in agencies with a few years of experience, people make errors. For example, a listing might have the wrong square footage recorded, which a client might feel is misleading, or an agent might forget to recommend a home inspection which could have caught potential problems. If a client sues because of this, the resulting settlement, legal defense, or restitution can cost quite a bit.
Large companies have special challenges when it comes to real estate errors and omissions insurance. As a company grows, sometimes it can be easy to lose track of small procedures or overlook problems that will later reappear. With many employees, the likelihood of mistakes also grows. In addition, larger companies tend to deal in larger properties and contracts—and issues surrounding a multimillion dollar plot of land can lead to multimillion dollar lawsuits.
There are a number of things that can go wrong for big companies, but there are ways they can protect themselves. Real estate errors and omissions insurance can keep big firms out of trouble and give them even more room to grow.