E&O and Risk Management

  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 performing.

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





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