When Steven opened his real estate brokerage in Lafayette, he knew contracts and paperwork would be part of the business. But after a long day juggling showings and client meetings, one mistake slipped through the cracks: a missing disclosure about a minor roof repair. Steven didn’t think much of it—until the buyers moved in, found a leak during the first heavy rain, and filed a lawsuit for damages.
The legal fees alone threatened to overwhelm Steven’s firm. That’s when he realized that without Errors and Omissions (E&O) insurance, his entire business was at risk—not just his reputation, but his financial future too.
Errors and Omissions insurance protects real estate brokers and agents against claims of professional mistakes, negligence, or incomplete work.
In real estate, even a minor oversight—like a missed disclosure, an incorrect listing detail, or a forgotten form—can trigger a client lawsuit. E&O insurance helps cover the cost of defending these claims, along with any settlements or judgments.
For Louisiana brokers managing dozens (or hundreds) of transactions a year, it’s not a question of if something might go wrong—it’s when.
Real estate is fast-paced. Even experienced brokers make mistakes. Some of the most common E&O claims include:
Failure to disclose property defects: Forgetting to mention a known issue like foundation problems or roof leaks.
Misrepresentation: Errors in advertising, square footage, or amenities that mislead a buyer.
Breach of duty: Not acting in the client’s best interests or mishandling confidential information.
Missed deadlines: Failing to submit paperwork on time can jeopardize a deal.
Wrong advice: Giving clients guidance on property value or inspection results that turns out to be inaccurate.
In each of these cases, E&O insurance steps in to handle legal costs and damages—so the broker’s business doesn't have to shoulder the burden alone.
Louisiana’s real estate market is dynamic—and sometimes unpredictable. Here’s why E&O insurance is even more important for brokers in the state:
Severe weather risks: Disclosures related to flood zones, storm damage, and insurance requirements are critical.
Historic properties: Older homes present hidden issues that aren’t always obvious during showings.
Cross-border transactions: Louisiana brokers sometimes deal with out-of-state buyers unfamiliar with local laws, increasing the chances of misunderstandings.
Fast market pace: In busy times, small mistakes happen more easily when trying to close deals quickly.
Without E&O protection, a single unhappy client could trigger a lawsuit that drains a firm's savings—or worse.
Errors and Omissions policies typically cover:
Legal defense costs (attorney fees, court costs)
Settlements and judgments awarded to claimants
Claims of negligence, misrepresentation, breach of duty
Allegations of mistakes in contracts, documentation, or disclosures
Most policies are written on a claims-made basis, meaning coverage must be in place both when the alleged mistake happens and when the claim is made.
Importantly, E&O does not cover:
Intentional wrongdoing
Fraudulent behavior
Criminal acts
It protects against honest mistakes, not deliberate misconduct.
The right amount of E&O coverage depends on:
The number of agents employed
The size of transactions handled
The firm's overall risk tolerance
A smaller agency might start with $500,000 in coverage, while a larger brokerage handling luxury properties might carry $1 million or more. Some franchise real estate brands even require minimum E&O limits for their affiliated offices.
A professional insurance advisor can help assess the right amount of protection for your business model.
While E&O insurance is crucial, it's even better to avoid claims altogether. Brokers can reduce their risk by:
Keeping detailed records of all communications and agreements
Using standardized forms approved by the Louisiana Real Estate Commission
Disclosing everything—when in doubt, disclose
Training agents regularly on compliance and ethics
Avoiding giving advice outside your licensed expertise (like legal or tax advice)
Clear communication, attention to detail, and documentation go a long way toward keeping your firm out of trouble.
A thriving real estate brokerage depends on more than closing deals—it also depends on protecting your business from unexpected risks.
Errors and Omissions insurance isn’t a luxury or an afterthought. It’s a foundational part of running a smart, resilient real estate firm. Without it, one small mistake could cost everything you’ve worked so hard to build.
If you're running a real estate business anywhere in Louisiana—whether you're just getting started or you've been helping families find homes for decades—it’s time to make sure your E&O coverage is ready to back you up.
Need help evaluating your E&O insurance options? Kastner Insurance specializes in helping Louisiana real estate brokers find the right coverage for peace of mind and long-term success.
Founded in 2017, Kastner Insurance Group is a full-service, independent insurance broker based in Lafayette, LA. Our insurance agents specialize in offering a variety of insurance products tailored to individual and commercial needs, making sure clients receive personalized and comprehensive coverage options from a variety of insurance companies/insurance carriers.
With over 43 years of combined experience, the team at Kastner Insurance Group is dedicated to providing expert advice and exceptional service. They proudly serve professional offices and businesses across Lafayette city/parish, Youngsville, Broussard, Baton Rouge, New Orleans, Alexandria, Acadiana, and statewide in Louisiana.
Call us today or visit our website for a customized quote.
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