The Top 5 E&O Claims Commercial Real Estate Professionals Face

There are various Errors and Omissions claims which could impact those professionals involved in real estate transactions.

Although Commercial Real Estate (CRE) firms tend to face litigation less frequently than residential firms, the risks and exposures that CRE firms experience are more severe and more costly to defend than residential real estate E&O claims.

It’s essential for all real estate firms to secure the proper insurance coverage to protect against these claims.

The top five claims commercial real estate professionals face most often are:

  1. Dual Agency. These claims can occur in any real estate transaction where dual agency is involved. Dual agency refers not only to the same agent, but also the same firm employing different agents who work together.
  2. Commissions. Real estate brokers occasionally bring suits against their clients to demand the collection of their commission or fees due. Typically, these suits involve a countersuit from their client alleging professional negligence against the real estate professional as well.
  3. Pollution. It is often alleged that a broker has failed to disclose their knowledge of a contaminant of some kind on the property they are selling or leasing. Some of these contaminants may include lead, asbestos, mold, etc. These claims typically involve the failure to disclose by the property owner which is then imputed upon their real estate agent and broker.
  4. Owned Property. Many commercial real estate professionals get involved in transactions involving property they maintain an ownership interest in. Within these transactions claims arise against real estate professionals from the inherent conflict of interest created by their ownership and subsequent rendered services for their owned property.
  5. Buyer/Lesser Financial Creditworthiness. These claims relate to the inability of a tenant or buyer to fulfill their financial obligations as a buyer or tenant. This claim addresses the issue of whether the broker has a responsibility to properly financially qualify a buyer or tenant and the obligation they have to disclose that information.

Protect your business and avoid paying costly damages by reviewing your E&O insurance policy to ensure you’re protected against these claims. Be sure to also enlist the help of a qualified insurance professional so that any gaps in coverage can be identified.

Axis Insurance Services, LLC is a leader in the professional liability insurance industry. Our team of professional liability specialists can help you make the right changes to your E&O policy. Contact us today to learn more about how we can help 201-847-9175 or email

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