Real Estate Council of Alberta Fundamentals Practice Exam

What does Errors and Omissions Insurance provide for real estate professionals?

1. Protection against physical injury claims

2. Coverage similar to malpractice insurance

3. Liability for property damage

4. Support for identity theft cases

The correct answer is: Coverage similar to malpractice insurance

Errors and Omissions Insurance offers coverage that is akin to malpractice insurance and is specifically designed for real estate professionals. It protects agents and brokers from claims resulting from errors or omissions made while providing professional services. This type of insurance is essential in the real estate industry because it addresses the unique risks associated with aspects such as misrepresentation, failure to disclose important information, or errors in contracts. In contrast, the other options do not accurately represent the purpose of Errors and Omissions Insurance: protection against physical injury claims is typically covered by general liability insurance, while liability for property damage is also not included in this type of coverage. Support for identity theft cases is unrelated to the professional liabilities that Errors and Omissions Insurance is intended to cover, further emphasizing that this insurance is focused on the specific risks inherent in real estate transactions and professional conduct.