If you are a real estate professional, the smartest way to protect yourself from potential lawsuits is to get errors and omissions real estate professionals insurance. Mistake can be made while you are doing your job and legal action against you or your firm can be taken. Sometimes clients will find even the smallest or most frivolous mistakes may be able to get them a significant amount of money.
When you are covered by errors and omissions insurance, the insurance company will defend the claim and pay any judgement or settlement in your case up to the amounts stated in your policy.
There are other ways you can protect yourself from lawsuits in addition to having errors and omissions real estate professionals insurance. Keep careful record of everything you are advising to your clients. Write down if they declined a home inspection or what they said when you told them about home warranty protection. That way, if they come back and try to hold you responsible for something that went wrong with their purchase, you have records of what was said and done. Infact, it may be a good idea to get your client to sign a statement saying that you recommended a certain action.
No matter how good you are at your job, at some point you may just encounter that unhappy client and the sure way to stay covered against loss of time and money is to get errors and omissions real estate professionals insurance.