I have been calling around all day for insurance prices and every agent is trying to push me to get umbrella insurance. Do any of you brokers carry this?

If it's what I think it is, it covers more than just errors and omissions. It covers damage you might accidently do to property when showing it or listing it, personal injurty to clients, that sort of thing. I don't recall the word "Umbrella" being used when I was calling around for e&o, I think the word I was getting was "Comprehensive".

Umbrella insurance covers you above and beyond your E&O current policy's claim limits. Just think of it as cost efficiently extending/raising your policy limits.

If you have an E&O policy that will pay a max of $150K for your error, yet you're getting sued for an amount of $250K...you'd have to come up with the $100K if you lost if you did not have umbrella insurance.

If you have an umbrella insurance policy (in addition to your E&O) that covers you to 1 million dollars, you'll be covered and not have to pay nothing.

For an extra couple hundred dollars per year, the umbrella insurance is well worth it, in my opinion.

Thanks for the advice, however I have been getting quotes for more than a couple hundred per year, it still might be worth it though

Real Estate Broker in California would normally have:
- General Liability policy (might be a part of BOP - business owner's package, which covers property & liability)
- E&O to cover professional liability
- Workers Compensation (covers employees and 1099 "independent" agents)

Umbrella insurance adds to the limits of General Liability (or BOP) in increments of $1 mln. It has nothing to do with E&O.

Minimum premium commercial umbrella policy for a small scale operation would cost $350 (per each million of additional coverage) if you are lucky to get one at that price.

There is another cool thing you can do. Many insurers offer you double liability limits within same General Liability or BOP policy at a nominal cost. For example, the starter BOP policy for a Real Estate Brokerage in CA costs $500 a year. It includes $10,000 business property coverage and $1,000,000 liability per accident/$2,000,000 aggregate for the policy year. At the cost of $15 a year (sounds funny) you can double that and get $2/$4, which is even better than $1 mln umbrella ($2/$3 at $350 a year).

Now, why you would think about getting an umbrella policy - you might be sued for enormous amount of money if your agent kills or handicaps someone on the road driving on behalf of the business. This is why you would rather make sure your GL/BOP coverage includes at least NON-OWNED AUTO coverage (employees/agents driving their own cars on behalf of the business). It does not cost much at all. Than umbrella would come on the top of that coverage.

Thanks, Mikhail. That was helpful. I'm thinking about opening a brokerage in a year or so, hopefully in North Carolina. In some of the other threads, I've seen comments about agents being charged $40 and $50 per transaction for E&O. That sounds like a lot of money to me--A LOT! I currently live and work in NYS, and my broker charges us $3 per side on each transaction and that covers the cost of the policy for him. Why is it so expensive at other brokerages? Does it have to do with the region or something? Thanks! CeeFee

In California you would pay $80-120 per transaction. On the other hand in our area average sales price is approaching one million, so, it's easy to pay that fee.

Thanks again. I guess it doesn't matter what the transaction fee is because the agents will have to pay it. And I suppose it's all relative to the average price tag of property in the area. Where I live the average house sells for about $130K.