Errors and Omissions Insurance--Flipping in California

[Stefanie Marshall]

I have been flipping homes for awhile, but I am simply an investor, and my agent and I were talking about starting a brokerage. She told me that she didn't think agents or brokers could flip houses because the E&O insurance providers would not insure an agent/broker who flips and in order to be an agent in California you have to have E&O Insurance. My response was...."Tarek and Christina...from Flip or Flop...they are agents in California...flipping....how are they doing it?

Anyone know the answer to this question?

[Russell Brazil]

Originally posted by @Peggy Maneri:

Is anyone aware of an insurance carrier who will include temporary agent owned properties, ie: flip properties, with E&O coverage in California? I realize the risk is small, but my broker is insisting they can't take the risk of an error on one of these transactions; and their policy excludes flip properties generally because the relationship is between agent & myself as a party buyer/seller entity owner- but there is still the risk of a 3rd party coming back, or a crazy buyer filing a claim.

Nearly all E&O policies have an exclusion when you are a principal to the transaction. Due to this, many brokers do not allow you to buy and sell your own properties. What many agents do is they hire another agent to represent them. That is what I do now.