INSURANCE GUIDE
Brokerage E&O vs. Individual Agent E&O Insurance
A brokerage E&O policy and an individual agent policy are not automatically interchangeable. The named insured, definition of insured and professional-services wording determine who and what may be protected.
The policy language controls
The fact that a brokerage carries E&O does not by itself prove that every affiliated licensee has identical protection for every transaction. Start with the Named Insured, the definition of Insured and the definition of Insured Services.
What a brokerage policy may cover
A brokerage policy may extend insured status to owners, employees, licensees or independent contractors while they are performing covered professional services on behalf of the insured firm. The exact wording varies by policy.
When individual coverage may matter
An individual agent may want separate coverage when the brokerage policy does not extend as expected, when the agent performs outside services, when prior transactions need special consideration, or when contractual or business circumstances call for separate protection.
Independent contractors
Many real estate licensees work as independent contractors. Do not assume that employment classification alone determines insured status. Review the policy definition and any conditions that apply to affiliated or former professionals.
What happens when an agent changes brokerages?
Past transactions can create difficult coverage questions. The former brokerage's policy, the new brokerage's policy, individual coverage and the applicable retroactive dates may all be relevant. Claims-made reporting requirements also matter.
Questions agents and brokers should ask
- Who is a Named Insured and who qualifies as an Insured?
- Are independent contractors included?
- Are former agents covered for prior work, and under what conditions?
- What professional services are included?
- What is the retroactive date?
- Who controls reporting and defense?
- Does the policy address agent-owned property or other specialty exposures?
In this guide
The policy language controls
The fact that a brokerage carries E&O does not by itself prove that every affiliated licensee has identical protection for every transaction. Start with the Named Insured, the definition of Insured and the definition of Insured Services.
What a brokerage policy may cover
A brokerage policy may extend insured status to owners, employees, licensees or independent contractors while they are performing covered professional services on behalf of the insured firm. The exact wording varies by policy.
When individual coverage may matter
An individual agent may want separate coverage when the brokerage policy does not extend as expected, when the agent performs outside services, when prior transactions need special consideration, or when contractual or business circumstances call for separate protection.
Questions about this coverage?
Talk with ECLICK about your current policy, upcoming renewal, or the coverage you are comparing.