According to 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) are 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: Fees are doubled when
conducting dual agency.
Supplementary Risk Coverage:
There is $20,000 E&O insurance deductible. To cover this potential expense, we offer
supplementary risk coverage for our agents. It is optional, and only costs $49.95 per
closed transaction. Note: this fee is in addition to the Standard E&O fee of $135.00.
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: Fees are doubled when conducting dual agency.
Selling Agent Owned or Direct Relative Property:
When an agent SELLS their own, direct relatives, including step relations or relation by adoption owned property, there is additional E&O insurance required. The Standard Risk Management fee
for selling agent-owned property is $335. There is an additional $33.50 per every Hundred
Thousand Dollar price increment over $1.0 million.
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
Copy of E&O Insurance Policy and E&O Insurance Declarations may be requested from our office.