Errors and Omissions
All active licensees licensed in accordance with the provisions of R.S. 37:1430, et seq., are mandated to carry errors and omissions insurance to cover all activities contemplated under this Chapter. See R.S. 37:1466. Errors and omissions insurance; mandatory for all licensees.
Initial or renewal licensees electing to obtain equivalent errors and omissions insurance coverage in lieu of the group policy shall submit the following Independent Errors and Omissions Insurance form along with a copy of your policy declaration page before a license will be issued:
Upgrades and Transfers Any licensee who changes their license type via upgrade, i.e. salesperson to broker, or transfers to a new supervising broker must provide proof of errors and omissions insurance. If you purchased the LREC group policy, your errors and omissions insurance will follow your license through any transfer or upgrade process. For more questions regarding errors and omissions insurance in the case of upgrades or transfers contact the LREC Licensing Division at email@example.com.
GROUP ERRORS AND OMISSIONS PROGRAM (View a sample policy and endorsements.)
Rice Insurance Services Center (“RISC”) has been awarded the Louisiana Group Errors and Omissions Insurance Program. Highlights of the program are listed below. The issuing company will be the Continental Casualty Company, one of the CNA insurance companies, rated “A” by A.M. Best.
- Premium – $149 ($142 premium + $7 LREC transaction fee) for $100,000 per claim/$300,000 aggregate limits
- Deductible – $1,000 per claim for damages
- No deductible for defense of covered claim
- Allows up to 25% ownership/financial interest by licensee
- Primary residence coverage under certain conditions
- Prior acts coverage, provided the subject professional services were performed on or after the licensee’s retroactive date
- $25,000 supplementary payment for damages and expense for claims arising out of Fair Housing Discrimination-subject to $1,000 deductible
- $10,000 per claim/$20,000 aggregate sublimit for damages for environmental claims (defense costs do not reduce available environmental sublimits)
- $5,000 per claim/$10,000 aggregate sublimit for property damage or loss of use of property resulting from property damage claims arising out of Lock Box Liability (defense costs do not reduce available lock box sublimits)
- $5,000 per claim/$10,000 aggregate sublimit for Escrow Claims (defense costs do not reduce available escrow sublimits)
- $5,000 supplementary payment for Security Breach Notification to reimburse real estate firm for costs incurred to provide required notification to clients of a security breach (up to a maximum of $10,000 per real estate firm, regardless of the number of licensees or incidents involved).
- $2,500 aggregate limit for attorneys fees to respond to a covered subpoena in a lawsuit relating to a transaction where the insured performed professional services
Optional Coverage By Endorsement
You may purchase additional coverage as separate endorsements to the policy. The following endorsements are available to individual licensees. Firm licensees are only eligible to purchase a conformity endorsement to other states that require that firm licensees maintain real estate E&O coverage and where the firm has an active real estate license. Please indicate your selection of endorsements on the supplementary enrollment form. Send the supplementary enrollment form with your check made payable to RISC.
A. Limited Claim Expenses Coverage Regulatory Complaints Endorsement – provides defense of any complaint to a real estate regulatory board or commission which arises from a negligent act, error or omission in the rendering of Professional Services that would otherwise be covered by the policy. Continental Casualty Company will pay Claim Expenses up to a maximum of $2,500.00 per complaint/$5,000.00 Aggregate in defense of such complaint pursuant to this endorsement. The cost of this endorsement is $25.00.
B. Conformity Endorsement – If you have a real estate license in another state that has mandatory requirements for insurance, you may purchase a Conformity Endorsement to make your Louisiana policy conform to the requirements of that state. To be eligible for this endorsement, you must be actually domiciled in Louisiana or treated as domiciled in Louisiana by the policy terms. The cost of this endorsement is $25.00 regardless of the number of mandatory states listed on the endorsement.
C. Residential Personal Interest Endorsement – provides coverage up to policy limits for claims relating to the sale or listing for sale of residential property (as defined in the endorsement) in which you have an ownership or financial interest, under certain conditions. The cost of this endorsement is $50.
D. Appraisal Endorsement – Provides coverage up to policy limits for your services as an active licensed residential certified real estate appraiser, general certified real estate appraiser, or real estate appraiser trainee. This endorsement is available to licensees who hold both an active real estate license and an active appraisal license. This endorsement is now also available to individuals who only have an active Louisiana real estate appraiser license (without also having an active real estate license). The cost of this endorsement is $250.
E. Increased Limits of Liability
- $250,000.00 per claim/$750,000.00 total limits: Individual licensees may purchase $250,000.00/$750,000.00 total limits. Licensees whose real estate activity is at least 75% residential sales AND who have had no claims in the past 5 years may purchase for $275.00 ($149.00 to LREC for group coverage + $139.00 to RISC for Increased Limits Endorsement).
- Licensees with residential sales contributing less than 75% of their total real estate activity and/or who have had claims in the past 5 years may purchase for $325.00 ($149.00 to LREC for group coverage + $189.00 to RISC for Increased Limits Endorsement).
- $500,000.00 per claim/$1,000,000.00 aggregate: Individual licensees may purchase $500,000.00/$1,000,000.00 total limits. Licensees whose real estate activity is at least 75% residential sales AND who have had no claims in the past 5 years may purchase for $350.00 ($149.00 to LREC for group coverage + $214.00 to RISC for Increased Limits Endorsement).
- Licensees with residential sales contributing less than 75% of their total real estate activity and/or who have had claims in the past 5 years may purchase for $413.00 ($149.00 to LREC for group coverage + $277.00 to RISC for Increased Limits Endorsement).
Excess Program for Firms
Higher limits are also available on an underwritten basis for real estate firms domiciled in Louisiana. The principal broker or officer of the firm must complete an excess application form in order to be considered for this excess coverage. All Licensees associated with the firm must be insured under the group policy. This program is written by Continental Casualty Company and is not guarantee-issue; however, most Louisiana firms qualify for excess coverage. Please call RISC’s toll-free number if you have any questions.
Send the basic premium to the Commission with your application. Do not send payments for optional coverage and/or higher limits to the Commission.
Contact Rice Insurance Services Center at: (800) 637-7319 or (502) 897-1876 or firstname.lastname@example.org.
LREC AND PREMIUM PAYMENTS
The Louisiana Real Estate Commission accepts premium payments for the group errors and omissions insurance policy as a courtesy and convenience to licensees. The premiums are forwarded to the program administrator upon receipt and are not maintained by the Commission. Although it is our desire to assist you in any way that we can, questions about your coverage, or requests for policy documents, must be submitted directly to the program administrator. See Group Program Highlights above for contact information.