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Real Estate E&O Tail Coverage – Everything You Need to Know

Tail E&O Coverage for real estate professionals ensures you’re covered for past transactions, even after your E&O insurance coverage has lapsed. It’s especially useful if you’re retiring or moving into a role that provides you with insurance coverage, meaning you no longer need your individual E&O policy. 

Here’s what you need to know about Tail Coverage . . .

What is Real Estate E&O Tail Coverage?

Optional tail coverage is also known as “Extended Reporting Period.” It extends your E&O insurance after your policy has lapsed, to cover any claims that arise from transactions you were involved in while you were insured. 


A real estate professional with 10 years of experience decides to make a major career change. She stops her real estate E&O insurance because she’s getting out of the industry and plans to retrain in a different area. But, six months into her new career, previous buyers lodge a claim against her for misrepresentation. The former clients allege she failed to disclose defects in a property they purchased. The defects have only just been discovered during renovations. Without Tail Coverage, the real estate agent must defend the claim independently (and be responsible for legal fees and any judgment) without the backing of her insurer. This is because the claim was filed after her E&O Insurance lapsed. 

With Tail Coverage, the former real estate agent is in a much better position. If the agent had an individual real estate E&O policy in her name, and she had talked to her E&O insurer within 30 days of her renewal date, she could have purchased Tail coverage. With Tail coverage, she would have been covered by her previous insurer who will help her to defend the lawsuit. This means less out-of-pocket costs and less stress. 

When is Tail Coverage Needed?

Tail coverage is useful in times of transition and any circumstances where the lapse of a real estate professional’s E&O insurance policy is planned. This includes:

Change of career

As in the above example, Tail Coverage is useful if you plan to move out of the real estate industry and no longer require your E&O Insurance to be maintained. 


Real estate professionals who are planning retirement should consider Tail Coverage to ensure they’re covered after they let their license lapse. This protects retirees from costly lawsuits that can greatly affect their retirement plans. 

Planned career breaks 

Tail Coverage is useful if you’re planning extended periods away from work —  maybe you’re planning to travel for a year or spend a few years at home raising your children. It can cover the transactions you were involved in when you were insured. And with Tail E&O, you can save paying for individual E&O coverage that you don’t need because you’re not actively working. 

Things to Consider

You won’t need Tail Coverage if you’re simply changing E&O insurance companies without a gap in insurance coverage. Check the fine print in your insurance documents, but almost all E&O insurance policies, including CRES, cover transactions as far back as the previous policy covered. 

Your Tail Coverage will only cover transactions that were completed before the start of the Tail Coverage. Any transactions after the Tail Coverage effective date will not be covered. 

CRES Tail Coverage

CRES offers Tail Coverage to our E&O Insurance clients. If you’re planning a career change, retirement, or other planned absence from real estate, you can choose to extend your coverage with up to four years of Tail Coverage. 

CRES Tail Coverage gives you peace of mind, so you won’t have to face costly lawsuits alone in times of transition. You’ll be covered for all transactions completed while you were insured, even after your E&O insurance policy has lapsed.

Having the right insurance coverage is so important for real estate professionals — even if you’re moving away from the industry. It’s a way to minimize your liability and to protect yourself financially in case a claim occurs.

See our Ultimate Guide to Understanding Real Estate Errors and Omissions Insurance


CRES can help find you the best insurance options for the best price, because we have  access to more product options and carriers than just about anyone else (we’re part of Arthur J Gallagher, one of the largest insurance brokers in the world). From real estate E&O for individuals and firms, to Business Owner’s Policies, Cyber Liability Insurance, Worker’s Compensation Insurance, and Surety Bonds, we’ve got you covered.

With every CRES policy, you’ll get access to expert real estate  attorneys, 7 days a week, to help you resolve issues before they turn into claims. 

Contact the CRES team at 800-880-2747 for a confidential discussion today.

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