As a real estate professional, you know the importance of errors and omissions (E&O) insurance. It’s professional liability insurance that protects you and your team against potential lawsuits.
Seller’s E&O is being offered by innovative real estate E&O companies as part of your firm’s real estate E&O package. It helps your agents win more listings, so it can help you build your business.
When your brokerage provides Seller’s E&O to potential sellers, it’s an excellent way to differentiate you from your competition. It’s a unique competitive advantage that can drive more contacts from potential sellers, and help your team close more listings.
To reap the benefits of Seller’s E&O, your team needs to understand what Seller’s E&O is and the advantages it offers to prospective sellers. Here’s how to increase your agents’ understanding and kickstart their communications to help convert more inquiries into listings.
What is Seller’s E&O?
Sellers face many risks after the sale of their home that most don’t even realize.
Regular homeowner’s insurance policies don’t cover any claims after closing. And home warranties are usually limited in scope and won’t cover sellers for any legal fees involved in settling claims.
This leaves sellers particularly vulnerable to the stress and expense of post-closing lawsuits.
Seller’s E&O gives sellers up to $25,000 (or more) in insurance to cover claims and legal fees for 6 months after closing, in case they’re faced with a disgruntled buyer.
Most post-closing problems arise when a buyer discovers a major defect after they’ve purchased a property. These disclosure-related claims are very common, and can involve not only undisclosed problems — but also problems unknown to the sellers.
So even if the sellers are not at fault in terms of disclosure of known defects, they can still face a lawsuit for unknown problems after closing.
How Agents Can Use Seller’s E&O to Win Listings
1. Promote your unique Seller’s E&O protection to potential sellers
When you’re offering Seller’s E&O Protection Plans to your sellers, you’re in the minority and this offers a significant advantage.
2. Promote the Seller’s E&O coverage in all advertising, on your website, and in mailers
Include it in your seller’s proposal template, available for the whole team to use.
3. Focus on the incredible and unique benefit only your agents can offer to protect sellers
Disgruntled buyers are the #1 cause of post-closing problems for sellers. The average disclosure-related problem typically costs around $10,000-$20,000 in legal fees and damagesWhen sellers list with you, they’ll be protecting their equity at no cost to them for up to 6 months after closing.
4. Communicate the difference between Home Warranties and Seller’s E&O
A home warranty is a contract with a company to cover repairs due to wear and tear, for a specific list of appliances and systems up to a specific dollar amount. Those dollar amounts are typically much less than the $25,000 protection Seller’s E&O offers. And home warranties offer sellers no protection against legal fees.
Many agents will give their sellers a home warranty to help attract buyers. So a home warranty is more “buyer protection” for future problems with a home.
Seller’s E&O is sellers’ insurance to protect sellers from post-closing problems usually related to disclosure issues. That protection will cover damages and legal fees up to $25,000 (or more).
What Level of Coverage is Available?
CRES Seller’s E&O Protection Plan provides each seller with up to $25,000 E&O insurance coverage for up to 180 days after closing. If a seller wants extra protection, they can purchase an extension of another 180 days.
Sellers who have a CRES Qualified Home Warranty can increase their level of Seller’s E&O protection up to $50,000.
CRES Seller’s E&O Protection Plan covers the seller’s legal defense costs and damages up to specified limits. (Most other Seller’s E&O policies only cover the seller’s defense costs, and they don’t cover damages.)
Contact CRES for a Seller’s Protection Plan for Your Clients
CRES real estate E&O experts can help you identify the right coverage for your business. From real estate E&O insurance to cover your firm and agents (that includes Seller’s E&O), to Business Owner’s Policies, we can tailor the right solution for you from our unparalleled access to more insurance options than just about anyone!
Contact CRES at 800-880-2747 to learn more about E&O with Seller’s E&O that can help your team build business.