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Our company sets up the policy, we pay. Much more expensive than what others are saying. Not sure if it's because it's CA or if it's because if we complete our checklist of required items our company covers the "deductible".
Do sales associates working for a big firm like Keller Williams need to have E and O insurance for themselves? Or does the firm provide it for them? How much would I usually expect to pay monthly for it?
I see this thread has been ongoing since 2010 so I am happy to provide my input. I have been handling Real Estate E&O insurance for over 12 years. Real Estate E&O Insurance is in a league of it's own. I see many of the people on here commenting are from various states so I will start off by saying that California has the highest rates in the nation. There are a few states such as CO, MS and NM are a few that I know off hand that require the individual agents to purchase their own insurance as well as the brokerage.
There are about a dozen (+/-) carriers that offer real estate E&O in CA. There are only about 5 that are competitive. Those of you that are agents, I have seen the fee charged to their agents vary greatly. That has to do with the preference of the brokerage owner. The cost that drives the price of the insurance is, claims, gross commission income, number of agents and disciplinary actions. Additional factors are the limits of liability and deductible options.
Is an individual agent required to carry their own insurance? That is up to you and the state you reside in. If you work for a brokerage then you are likely covered under their policy as long as the policy is in force continuously. If there is ever a break in coverage or they stop carrying E&O insurance that is where you are left exposed. Also keep in mind your coverage is subject to the coverage chosen by your brokerage.
For the poster asking about BPO coverage only, I do not know of any E&O carrier that ONLY covers BPO's. There are very few carriers that will consider offering terms for 100% BPO activity. Every carrier has their guidelines and coverage's and you may or may not fit into their guidelines.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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The guy I bought this brokerage from had lots of claims. His premium was exorbitant. I managed to get it down to a per transaction fee after a couple of years.
His final claim was for a commercial real estate transaction, and he accused me of not having a proper prior acts date. It turned out his policy didn't cover commercial real estate at all, nor did it cover vacant land, which makes up about 35% of our transactions. I enjoyed telling him to go pound sand.
Often I come across brokers or agent that carry a policy that has lots of gaps in coverage. I don't expect all real estate offices to understand insurance so that is why I have always been proud of providing more than the bare minimum information so that my clients can make an informed and educated decision about their insurance. You never want the insurance company to deny a claim. Remember in the end that you get what you pay for. If someone offers you a price that is several hundred under everyone else then you have to ask yourself why. Also you should always shop.
It's a JOKE because a salesperson is a sub agent to the customer. The BROKER and/or the brokerage company are the responsible parties who will be named as a defendant in a lawsuit... not the agent !!!! So, brokers make their agents pay their premium (typically overcharge and pocket the difference) and then they slide in something like what C21 does wherein they require the salesperson to also agree to pay most of the deductible if a claim is paid on behalf of the broker/brokerage. Rip off folks. Yes, your broker is stealing from you. With these big franchises, like KW and C21, they make you pay them in order for you to work for them !!!! How many other employers get away with that? Working for free is one thing, letting them rip me off is another.
And your broker puts you out on the street and hopes and prays you do not get him into any legal trouble under which he can be sued. Agents can be a huge liability to the broker. You are upset because he asks you to pay a portion of the insurance that covers him AND you? Guess what....if he gets sued for something YOU did....you are going to get sued as well. Consumers will name the company, broker and agent in the suit. Our state requires every licensed salesperson to have E&O, so it is a business expense you take on when you decide to enter into this career. Why should I make my broker pay that for me?
I would honestly never want to be a qualifying broker responsible for the actions of a bunch of agents...I applaud those that do take on that task as well as building their own business.
And newsflash....real estate companies are in business to make money. The primary way they make money is off the sales of their agents, either by a per transaction split and/or monthly fees. Do you think companies let agents come on board and just work for free?
You are in the WRONG business if this is how you think. If you don't like it, put your money where your mouth is and go get your broker's license, be your own boss, and take on all the responsibilities that come along with it.
Last edited by LCTMadison; 02-21-2015 at 05:57 AM..
This is your problem right here. You aren't an employee. You are an independent business owner.
Since you are an independent business owner, the brokerage can only exercise so much control over what you, unlike an employee where they can dictate exactly what you do and when you do it. Since they don't have complete control over the agents underneath their brokerage, they are taking a risk. As such, they want those agents to cover their risk since it is your behavior that places them in harms way.
It's a JOKE because a salesperson is a sub agent to the customer. The BROKER and/or the brokerage company are the responsible parties who will be named as a defendant in a lawsuit... not the agent !!!! So, brokers make their agents pay their premium (typically overcharge and pocket the difference) and then they slide in something like what C21 does wherein they require the salesperson to also agree to pay most of the deductible if a claim is paid on behalf of the broker/brokerage. Rip off folks. Yes, your broker is stealing from you. With these big franchises, like KW and C21, they make you pay them in order for you to work for them !!!! How many other employers get away with that? Working for free is one thing, letting them rip me off is another.
I'm pretty certain the agent would be sued first and the others would be named as co-defendants. Secondly, the E&O is for the agents. I split mine up evenly per agent, no excess charges. It's a shared expense. Maybe some companies do overcharge but you should be informed if you're going to make the sort of off-base remarks.
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Insurance Input
