CRES Insurance FAQs

Any financial duty placed on an insured, specifically Mortgage Brokers, can lead to a few specific types of claims. Most typical for mortgage brokers involve:

1. Failure to properly qualify applicant who subsequently was delinquent
2. Failure to properly advise client of risks
3. Failure to properly review loan documents

Even if you’ve done everything right, you can still be named in a frivolous lawsuit.  Having Mortgage Broker E&O will help you avoid paying those defense costs yourself. Learn about CRES Mortgage Broker E&O

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Appraisers run the risk of incorrectly appraising the value of certain properties. Typical appraising claims filed in court seek damages in connection with an alleged error in an appraisal.

Even if you’re named in a frivolous lawsuit, you can still incur significant legal fees that would be covered by Appraiser E&O. Learn more about CRES Appraisal E&O

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Real estate lawsuits are filed every day in every part of the country. With the complexities involved in real estate transactions, there are no guarantees that you’ll never receive a demand letter or be named in a lawsuit concerning your professional services as a real estate agent or broker.

The ten most common claims made against real estate licensees:

1. Fraud
2. Breach of Duty
3. Breach of Contract
4. Negligence
5. Bodily Injury / Property Damage
6. Misrepresentation regarding the Condition of the Property
7. Consumer Protection Act
8. Earnest / Escrow Money Dispute;
9. Misrepresentation regarding Flooding or Leaks
10. Misrepresentation regarding the Value of the Property

Even if you’re named in a frivolous lawsuit where you did everything right, you can still incur substantial legal fees to defend yourself if you’re not covered by E&O insurance. Learn more about CRES E&O for Real Estate Sales

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Are you covered under your firm’s real estate E&O policy?  If you’re not, your family’s personal assets and your livelihood could be at risk should you be named in a real estate lawsuit, even a frivolous one.  The average E&O lawsuit costs more than $40,000 — are you prepared to pay that out of your own pocket?

Even if you are covered under your firm’s policy, there can still be gaps, limitations, and exclusions — based on exactly what your firm’s particular E&O policy covers and doesn’t cover.

And your firm’s annual policy limit could already be exhausted — by the time you have a claim. You may find yourself responsible for any damages. And your firm may decide to hire their own attorney and bill you for the legal fees.

Your firm’s policy was likely designed to benefit the firm, and you may find it doesn’t really adequately protect you.

E&O coverage must be continuous, either in your name or the company’s name, to protect you from past transactions.

If you plan to change companies, your company is being sold, or the company may have let their E&O lapse, your prior transactions may not be covered.  Maintaining an individual E&O policy that moves with you will help ensure you have continuous coverage.

Learn more about why you should have an individual real estate E&O policy

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The Agent-­Owned Property (AOP) endorsement adds coverage when you want to be the listing agent on the sale of your own, or a direct relative’s residential one- to four­-unit property,

There are specific rules which must be met in order for the carrier to insure the sale of AOP:

• A written home inspection report is issued by an ASHI, CREIA, NACHI, or NAHI member inspector
• An approved home warranty is in place
• All state-required property transfer disclosure statements are properly completed, signed and delivered
• The property in which the insured holds an interest consists of 1-4 residential units.

The coverage is a broadened coverage to the standard E&O policy coverage. Coverage is intended for selling your own properties.  Unlike other E&O companies that only offer coverage for your primary residence, CRES will cover other residential property where you hold an ownership interest.*

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Contingent liability is also known as CRES Open House and Showings coverage.  It’s an additional endorsement that broadens coverage, to include any claim or suit that is brought against you for damages because of bodily injury (to someone other than you) or property damage.  CRES Contingent liability also covers bodily injury to others caused by signs used to advertise the property, such as For Sale or Open House signs.

If someone gets hurt at a showing or from your real estate signage, or something is stolen at an open house, you may  be liable.

This coverage is usually excluded from a general liability policy for real estate professionals.  CRES E&O policies are customized to cover your real estate activities and can include Open House and Showings coverage.

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If an Errors and Omissions policy is not renewed on the annual date of coverage, it is considered lapsed. As stated under Prior Acts coverage, E&O coverage must remain constant for claims to be reported for review and coverage is subject to underwriter approval. If the effective date is missed on purpose or by accident, it is considered a lapsed policy. On rare occasions with underwriting approval, lapsed policies can be reinstated to retain Prior Acts coverage.

If a policy is lapsed because of accounting issues, our accounting department does have the discretion to reinstate policies by charging an amount to make the policy current with a late fee.

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Prior Acts coverage refers to how far back in time your professional liability (E&O) insurance policy covers you for services you rendered to clients.

The Prior Acts date is the inception (first) date of uninterrupted coverage. A policyholder needs to maintain continuous Errors and Omissions coverage from that date — and be sure the current policy covers ALL services the policyholder has ever been involved with. With continuous E&O coverage for all the types of services you’ve ever been involved with, the E&O policy in place at the time the incident is reported would be responsible for paying any covered claims.

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Tail coverage or Extended Reporting Period extends your current E&O overage for 1, 2, 3, or 4 years should you retire, sell your business, move out of real estate, or take a temporary leave.

Tail coverage may be issued within 30 days of renewal of the existing policy by your existing E&O insurance company. The Tail can be purchased by the Named Insured (individual or company) on the current E&O policy.

• If you have an individual E&O policy, you can purchase an individual Tail policy.
• If your company is sold, the company may purchase Tail coverage for its licensees.

Tail coverage covers you for claims that may occur from your prior transactions after you no longer work in a real estate-related area or no longer own a real estate-related business.

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Many individuals choose to purchase their own policy to ensure continuous protection for all services you’ve ever been involved in. Your own policy may cover activities not covered by your Firm’s policy, may reduce your retention (out-of-pocket claims expense), will ensure you’re protected should your Firm’s coverage lapse or be exhausted by other claims, and allow you to offer CRES warranties, Seller’s Protection Plan, and other benefits to clients.

By maintaining an individual policy, it will cover you for past transactions, as long as the coverage has been continuous. And an individual E&O policy is portable and can move with you.

Learn more about why you may want an individual real estate E&O policy

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Under the policy of a Corporation, S-Corp, or LLC, the firm as an entity is covered as a named insured.

Under a real estate sales company, the principal broker and any licensees “hanging” their license under the firm’s license are covered for any E&O claim.

With an appraisal, escrow, mortgage broker, or property management company, the owner, employees, licensees, and independent contractors are covered.

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All professional services listed on the Declarations Page of your policy are covered.

CRES Errors and Omissions insurance can cover you for:

• Residential real estate sales
• Residential property management and leasing
• Residential appraisal
• Residential mortgage brokering
• Commercial real estate sales
• Commercial property management and leasing
• Escrow (broker-held or third-party)

Through our online system, you can select all of the activities for which you need coverage to be included in your quote.  Choose your state and activities for which you need coverage to get your CRES E&O + ClaimPrevent® policy quote.  When you’ve customized your policy to cover your particular risks, you can buy most policies online in minutes.

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Everyone should have coverage when transacting Real Estate Sales, Appraisal, Escrow, Property Management, Mortgage Brokerage, or Transaction Coordinator business. The following is a breakdown of who and what is covered under each entity form:

Firm: Firm, Broker, Licensees, Independent Contractors, and all employees
Broker: Broker, Licensee
Licensee: Licensee

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E&O stands for Errors & Omissions, and is often referred to as professional liability insurance. Any mistake made in the process of conducting your business activity carries liability. If someone finds that you breached your duty or failed to disclose aspects of a real estate transaction, Errors & Omissions insurance is designed to cover the costs of defending yourself against any legal action, and paying any settlements or judgments that may be issued against you.

Errors and Omissions coverage can also protect you from frivolous lawsuits.  Even if you did everything right, you can still incur significant legal fees defending yourself if you don’t have E&O coverage.

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Policies on a “claims made” basis cover claims reported during the policy term, regardless of the date of the original transaction. CRES E&O insurance, for example, is a “claims made” policy. Coverage is triggered by the date of the claim, rather than date of the original transaction.

In contrast, “occurrence” policies cover claims which occur as a result of actions during the policy term (like auto insurance), regardless of when reported.

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As a CRES E&O policyholder, your E&O works for you PRE-CLAIM.  When you have a question, need a letter or contract reviewed, need a letter written, or have a situation in which you need guidance, the CRES ClaimPrevent® Legal team is here to help.

Our nationwide team of local real estate expert litigators brings a wealth of experience to help you prevent claims before they happen.

Unlike other E&O that only helps you AFTER you have a claim, CRES E&O + ClaimPrevent® actually helps you resolve situations and PREVENT claims!

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When you purchase a CRES Qualified Home Warranty for a client and there is a claim on that property while you are insured with CRES, your retention (out-of-pocket claims expense) will be reduced up to $5,000.  So, if you have a $2,500 retention, your out-of-pocket claims expense will be $0.*

When you provide a CRES Building Permit History Report to a home buyer before closing, you reduce your out-of-pocket claims expense by up to $2,500.*

Purchase a CRES Qualified Home Warranty and give the buyer a CRES Building Permit History Report before closing and reduce your out-of-pocket claims expense up to $7,500.

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Seller’s Protection Plan (SPP), also known as Seller’s E&O, gives your seller clients their own $25,000 E&O policy for 180 days (and it can be extended by the seller for an additional 180 days).

This is available on most CRES E&O policies. Once you have Seller’s E&O as part of your CRES E&O, you can offer Seller’s E&O to every potential seller to win more listings!

The base $25,000 in Seller’s E&O coverage can be combined with the added Seller’s E&O that comes with purchasing a CRES Qualified Home Warranty (in certain states)*.  For example, when you purchase a CRES Qualified Home Warranty for that seller, it comes with an additional $25,000-$50,000 in Seller’s E&O.

There is a $2,500 retention (out-of-pocket claims expense limit) for the seller, and coverage is restricted to primary residences.  More about CRES Seller’s E&O Protection Plan.

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GCI refers to Gross Commission Income. This is based on the revenue generated by commissions or fees of any real estate service. This is not total revenues.

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The application requests information regarding the number of licensees, independent contractors, or employees to be covered, license numbers, previous coverage, professional services offered, and physical location of the office.

All application questions provide the information we need for underwriting.  We want to ensure that we write coverage specific to your location and business structure.

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A claim can result in an increase in premium. Our claims analysts will offer insight into the frequency and severity. Depending on the information provided, the underwriter will account or discount for the claims reported on a policy.

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Rate increases can be a result of multiple changes in your underwriting specifications. Changes such as increases or decreases in Average Sales Price, Number of agents/employees (if you’re covering you and your company), Years insured, Insured services, Claims reported can all affect the rating.

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Our ClaimPrevent® Risk Management fees (included as part of your real estate E&O premium) help pay for our Legal Advisory Services, available for all insureds to call for advice, document review and more. Much more than typical hotlines staffed by junior attorneys, the CRES ClaimPrevent® Legal Advisory Services are delivered by experienced real estate defense attorneys.  We have 50+ attorneys on-call, so you’ll always work with a legal professional who is local and knows your state laws and real estate regulations.

We have attorneys available within 4 hours or next business day to get involved early in a dispute and help resolve the issue before it becomes a claim.  CRES was the first real estate Errors and Omissions company to focus on actually preventing claims — and giving you a legal services benefit for your E&O investment (without having an E&O claim).

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CRES established the Real Estate Services Council Risk Purchasing Group, LLC. (RESCRPG) under the Risk Retention Act of 1996, to allow us to offer comprehensive prepaid legal services as a part of your real estate errors and omissions insurance.

Under the RESCRPG, coverage is required to include Risk Management (legal advisory services), which we offer to all companies and individuals on all of our quotes. RESCRPG Membership is required by our carriers.

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Your policy’s rating can be affected by Average Sales/Transaction Price, Number of Agents/Employees, Location of office, Gross Commissions reported, Claims reported, Years insured, and Professional Services rendered. There are additional rating factors that can cause an increase or decrease in premium.

Every CRES policy includes Legal Advisory Services with expert real estate defense attorneys on call to help you resolve situations.

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Minimum premium options vary by state, depending on policy limits, and whether you want an individual E&O policy or a policy to cover you and your company.

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Our Account Executives focus on helping you obtain CRES insurance customized to fit your particular business needs.

You’ll then work with an Account Specialist who is an expert in handling existing policy services, including your renewal process. (Your Account Specialist will continue to work with your AE and keep him or her updated on your account.)

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Coverage can be added at any time during the policy period. If you have a pending deal that involves a service not covered under the policy, a request can be emailed in to add the coverage to the policy immediately. We strive to make sure that we are able to cover your professional service needs as best as possible.

To request a coverage modification, a simple email request to your Account Executive or Account Specialist will suffice to begin the process of modifying coverage as needed.

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For your convenience there are several methods for submitting your monthly ledger for Per Transaction Company E&O plans. These options include:

• Logging in to your Member account on CRESinsurance.com, and entering your monthly transaction information to the online ledger.  Once you complete and save the ledger, you can submit payment online.
• Emailing your completed ledger to GGB.LV2.CRES.Ledgers@ajg.com. Please be sure to specify the payment method you’d like to use to process your payment. If it’s not a payment method we already have on file, we’ll need a completed payment authorization form to process your payment.
• Faxing your completed ledger to 1-858-618-1655. Please be sure to specify the payment method you’d  like to use to process your payment. If it’s not a payment method we have on file, we’ll need a completed payment authorization form to process your payment.
• Mailing a printed copy of your completed ledger with payment to:

AJG RMS LLC CRES AF
PO Box 95632
Chicago, IL 60694-5632

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CRES Insurance operates as a Managing General Agent for several preferred carriers. That means we are the underwriter for our preferred errors and omissions programs.

We’ve worked with about eight preferred carriers in our 25+ year history.  As better programs come along, we move from one carrier to another.  That’s why there are sometimes changes in carriers.   We want to give you the best coverage at the best price, so we negotiate with carriers for you.

As part of Arthur J. Gallagher, one of the largest insurance brokers in the world, we have unequaled access to product options few others have. If our in-house programs don’t offer the best coverage at the best value, we’ll shop from our unparalleled resources to find you the best protection at the best price.

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We are headquartered in Las Vegas, NV.

We also have Account Executives throughout the United States.

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An MGA is a Managing General Agent, meaning a specialized type of insurance agent/broker that, unlike traditional agents/brokers, is vested with underwriting authority from an insurer. Accordingly, MGAs perform certain functions ordinarily handled only by insurers, such as binding coverage, underwriting and pricing, and appointing retail agents.

CRES acts as MGA for several preferred carriers. We are specialists in the risks involved in real estate sales, appraisal, mortgage brokering, escrow, property management, and transaction coordination. When you insure with CRES, you work directly with a company that has more than 2 decades of protecting professionals like you from the very specific risks you face daily.  We review and approve your application, and we’re here to help you prevent claims DAILY with our Legal Hotline.

As part of one of the largest insurance brokers in the world, Arthur J. Gallagher, we can also act as a “super” insurance broker. We have access to product options that few other brokers can offer, to ensure we find you the right protection at the right price.

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CRES was founded in 1996 to protect real estate professionals nationwide with superior insurance solutions and proactive risk management.

Our founder, Jim Allison, was a real estate attorney who defended agents and brokers. He realized that a lot of little things could have been done upfront in real estate transactions to prevent problems. He started a prepaid legal program in California, and conducted seminars for real estate professionals. He was available by phone to answer questions, and advised clients about things they could do to reduce their risk.

He called his company Comprehensive Real Estate Services.

Another entrepreneur, Doug Campbell, had created a real estate Errors and Omissions insurance program. Campbell and Allison got together to create a new category of Errors and Omissions insurance for real estate professionals nationwide — customized E&O insurance that includes legal services.

Comprehensive Real Estate Services was shortened to “CRES.” Their breakthrough product became CRES real estate E&O + ClaimPrevent®.

The company began to work with real estate-related companies and individuals involved not only in real estate sales, but also appraisal, escrow, mortgage brokerage, property management, and transaction coordination.  We’ve grown to meet all the insurance needs of these businesses and individuals, to include: Business Owner’s Policies, Cyber Liability Policies, Worker’s Compensation insurance, and Surety Bonds were added to meet the needs of our clients.

More than 25 years later, CRES innovations in real estate E&O continue to lead the industry.

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The claim will be fully investigated and settlement will be entered into, if warranted, with consent of the broker (or company owner), per the policy terms.

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Call 858.676.9854 or submit the demand letter or lawsuit to the email address provided in your policy. See Submit a Claim

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Should you receive a written demand for money or services, you have an actual E&O claim.  Immediately contact claims at 858.676.9854 or the email address provided with your policy.

When you are threatened with a claim, don’t panic — and don’t immediately reply.  Start gathering documents about the situation.  Discuss the situation only with your broker or owner.

For CRES Real Estate E&O customers, every incident that is a potential claim should be reported to us, to help ensure that potential claim will be covered. See our related post, Report a Potential Real Estate E&O Incident Real-time to Reduce Risk of Coverage Denial.

Learn more about what to do and not do when an E&O claim hits.

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Our risk management hotline is available Monday through Friday, 8:00 AM -5:00 PM Pacific Standard Time.  We’ll gather information on your situation and then have an experienced real estate defense attorney from your state contact you within four hours or next business day.

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Call the CRES Risk Management hotline at 877.273.7467 or claims at the number or email provided with your policy. You can get help pre-claim within 4 hours or next business day.   Your attorney can answer your questions, write letters, review contracts and addenda, or guide you through a situation to help avoid an E&O claim or lawsuit.

The CRES hotline puts you in touch with local expert real estate attorneys who are experienced in real estate litigation.

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Contact CRES ClaimPrevent® Hotline at 877-273-7467.  Our local expert real estate attorneys will work with you to help prevent the claim or reduce its size where possible.

Once you’ve contacted our ClaimPrevent® risk management department about an issue or potential claim, it’s counted as incident reporting.

Whenever you think there may be a claim against you, or you’ve been given notice there is a claim, contact us right away. All claims should be immediately reported.

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Those that don’t meet the definition of “made and reported” or are specifically excluded by the policy.  Review your policy documents to learn more.

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Those that fall within and meet the terms of the grant of coverage.  Check your policy documents to learn more.

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