The Real Estate Commission’s Errors and Omissions Insurance Advisory Committee has completed its work and filed its report and recommendations with the Commission. The committee was charged to advise the Commission on whether the Commission should support legislation to require real estate licensees to maintain errors and omissions (E&O) insurance.
As a part of its study, the committee researched insurance programs in the thirteen states which have enacted laws requiring real estate licensees to maintain E&O insurance as a condition for keeping their licenses on active status. The committee also examined the results of an e-mail survey conducted by the North Carolina Association of REALTORS® to gauge the opinion of its members regarding a possible E&O insurance requirement. The committee learned that 77% of the 1300 persons responding to the survey have E&O insurance. Also, according to the survey, a little more than half think the Commission should require all licensees to carry E&O insurance because it would reduce all agents exposure to financial loss as well as protect consumers and enhance the professional image of real estate practitioners.
At the conclusion of its study, the committee, by majority vote, recommended to the Commission that it support legislation which would permit the Commission to require all or certain of its licensees (specifically, persons with active licenses) to purchase errors and omissions insurance and that the Commission consult with the North Carolina Association of REALTORS® and other organizations and parties which may have an interest in such legislation; however, unlike other states, the committee recommended that the legislation not direct the Commission to contract with an insurance provider for a group policy, but rather merely assure that licensees maintain the required insurance. The committee also recommended that the Commission include in a future continuing education Update course instruction on risk reduction, including the benefits of errors and omissions insurance coverage. The Commission approved the committee’s recommendations.
The Commission very much appreciates the valuable assistance given by the following members of its advisory committee: Patrice F. Jones (Belmont), N.C. Association of REALTORS® General Counsel Will Martin, Sharon L. Pelt (Raleigh), David L. Perrot (Kitty Hawk), John D. Van Dyke (Asheville), and Commission Members Allan R. Dameron and Wanda J. Proffitt. The Commission’s Director of Administration, Fran Whitley, and Legal Counsel Tom Miller served as staff advisors, and Executive Director Phillip Fisher facilitated the discussions.
[The Errors and Omissions Insurance Advisory Committee’s report can be found on the Real Estate Commission website www.ncrec.state.nc.us. Go to Site Map, then Reports.]
This article came from the October 2002-Vol33-2 edition of the bulletin.