E&O Insurance for Flippers?

5 Replies

Just joined the site and love it! Here's my first question......my wife lists and sells all of the properties we flip. Her broker just informed her his E&O insurance does not cover properties listed by an owner/agent. Yes, she is a partner in our LLC. We run all of our sales through her as the listing agent because it helps sell the property AND to have an added layer of protection with E&O insurance. Is this something new in the industry? Can anyone recommend a good E&O carrier that doesn't have this exclusion? Thanks in advance.

Didn't realize E&O was excluded for an agent's owned properties, but it makes sense since they're not just acting as an agent, but as a principle. But E&O only covers the agent, performing agent duties, for errors. It doesn't provide any coverage to you as the owner, so I personally wouldn't be concerned about it.

Wayne, my wife's broker said that he checked into his E&O coverage for the office and it does not cover agent owned listings… even if it's an investment property or their primary residence.

As I said, makes sense but still don't see any reason for concern.

Tell the broker to stop charging her E/O insurance per transaction (most do, not sure if yours does) for these transactions.    This is common and as an agent I got a lecture from several brokers I've worked for in the past.     The reality is after 100s of transactions i've never even come close to having a claim.     I honestly don't even know anyone who has had one either.     Sure one day i might say the refrigerator is included and it was never there to begin with, odds are that day i might even have to pay for the new refrigerator.     

I subscribe to the concept that if I don't know something, i don't guess.   Is this connected to city sewer?     *shrug* if that is important to you i'd check with the county.       Having a sewer bill doesn't mean you are connected.      I haven't crawled through the pipes to check.     Sure, if i really want to put the effort into it i'll call myself, but even calling and being told isn't 100%.    Let them call, it's far more important to them than it is to me.    

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here