E&O and Risk Management

  Per the CalBRE regulations, the broker is directly responsible for any real estate transaction that his/her agent completes. To cover possible expenses connected with this responsibility, we collect the Risk Management fee for each closed transaction. This fee includes the costs of E&O insurance, legal fees, settlements, judgments, claims, litigation, and other risk-management costs.

Agent and associated broker transactions (reported to the company) that satisfy E&O policy conditions may be eligible for up to $1 million coverage by our E&O insurance policy. IMPORTANT: Any unreported activity makes the agent 100% liable for all legal expenses associated with these transactions.

Standard Risk Management Fee:
For real estate transactions, up to $1.0 million, the Risk Management fee is $135 per closed transaction. There is an additional $13.50 per every Hundred Thousand Dollar price increment over $1.0 million.
Note: The Risk Management fee (not Supplementary Risk Coverage) is included in the brokerage fees for Dual Agency as outlined in Addendum NO1/Fee Structure

Supplementary Risk Coverage:
There is a $20,000 E&O insurance deductible. To cover this potential expense, we offer supplementary risk coverage for our agents. This coverage is optional, and costs $49.95 per closed transaction up to $1.0 million. There is an additional $4.99 supplementary risk coverage charged per every Hundred Thousand Dollar sales price increment over $1.0 million. If agent elects to pay the supplementary coverage, the agent or associated broker will not be responsible for paying the E&O insurance deductible. Note: Supplementary Risk Coverage Fees are doubled when conducting a dual agency transaction.

Selling Agent Owned or Direct Relative Property (AOP):
Selling Associate-Licensee owned property is considered when the agent, their company, trust name, family member or relative is on title. The E&O insurance for these transactions is covered in the broker fees as outlined in Addendum NO1/Fee Structure to the Independent Contractor Agreement (ICA). Supplementary Risk Coverage is not included and may be added at the agent's discretion.

IMPORTANT: Please note that E&O covers "errors and omission", not fraud, nondisclosure, or agent's illegal activity. Agent will be 100% liable and not covered by E&O insurance if they have conducted themselves against the employing broker's and/or CalBRE rules and regulations. If you are not sure how to proceed in a situation, consult with your broker for advice before performing.

Copy of E&O Insurance Policy and E&O Insurance Declarations may be requested from our office.




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