Errors Omissions Insurance: The Experience of States with Mandatory Programs for Real Estate Licensees

James E. Larsen, Joseph Coleman

Research output: Contribution to journalArticlepeer-review

Abstract

Errors and omissions insurance (E&O) is a mechanism to transfer financial risk, resulting from honest mistakes or negligence committed by a service provider, from both the service provider and the consumer to an insurance company. Real estate licensees in 38 states are free to obtain this coverage if they so desire, but 12 states currently require their active licensees to have E&O. The purpose of this study is to present information that policy-makers should consider in deciding whether to implement a mandatory E&O program in Ohio. Survey data collected from the Real Estate Commission (REC) in the mandated states, 201 REALTORS® operating in those states, survey data collected by the Ohio Association of REALTORS®, as well as empirical data collected from RISC, the preeminent mandatory E&O contract administrator, is presented and analyzed.

Original languageAmerican English
Pages (from-to)61-81
Number of pages21
JournalJournal of Real Estate Practice and Education
Volume8
Issue number1
DOIs
StatePublished - 2005

ASJC Scopus Subject Areas

  • Education
  • Economics, Econometrics and Finance (miscellaneous)

Disciplines

  • Finance and Financial Management
  • Real Estate

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