Are you renewing your real estate license or changing brokerages?   Make sure that you’re covered by errors and omissions insurance.

Rhode Island law requires all real estate licensees to document that they are covered by an errors and omissions insurance policy.  The policy can be either an individual policy and/or a principal broker’s blanket policy.  

Individual licensee:   If an individual license will be responsible for errors and omissions, the insurance shall be in an amount for each claim of at least fifty thousand dollars ($50,000.00) and in an aggregate amount of at least one hundred fifty thousand dollars ($150,000.00).

Principal broker’s blanket policy to cover licensees:  If a principal broker will be responsible for blanket coverage, the policy must comply with one of the following options:

Option 1:  A minimum of $50,000.00 per claim multiplied by the number of individual licensees affiliated with the principal broker, and in an aggregate amount of at least $150,000.00 multiplied by the number of individual licensees employed by or associated with the principal broker OR

Option 2: A minimum of $300,000 for each claim with an aggregate top limit of liability for all claims of at least ($1,000,000.00) during any one year.

If you decide to change offices, make sure to ask whether you will be covered by your new broker’s policy or whether you will need to purchase your own policy. If you will be covered by a principal broker’s blanket policy, check to see if the brokerage plans to charge you for part of the policy.

For more details about the amounts and type of coverage required, go to 230-RICR-30-20-2, Section 28.