Tennessee E&O FAQ

Where do I find the rule or regulation that requires me to have an errors and omissions policy?

TREC Rule 1260-01-.15 requires every licensee to carry errors and omissions insurance to cover all the activities contemplated under the Tennessee Real Estate Broker License Act. Paragraph 4 of this rule also requires that:

"Any independently obtained errors and omissions insurance policy shall, at a minimum, be issued upon the same terms and conditions as the policy obtained by the Tennessee Real Estate Commission pursuant to T.C.A. Section 62-13-112, including, but not limited to, the limits of coverage, the permissible deductible, the permissible exemptions and the term of the policy."

This means that by law, Tennessee agents are required to carry a policy that is equal to or exceeds the state’s policy. The state policy carries a relatively low deductible, while Real’s policy carries a higher deductible to make it more affordable for agents. Because of the higher deductible, Real’s policy does not meet Tennessee’s state guidelines.

If I purchase an individual errors and omissions policy, will I still have to pay the BEOP fee on transactions? And if so, why?

Yes. Real still carries an E&O insurance policy on behalf of all affiliated agents. The BEOP fee will be charged on each transaction to cover the policy Real provides. If your primary policy doesn't cover the claim in its entirety or is denied, agents can leverage Real’s policy as a supplement and submit their claims for additional review. Note: Claims will need to be submitted for review after primary insurance has been notified initially.

Whose E&O insurance is primary if there is a claim filed?

If an agent purchases an individual errors and omissions (E&O) policy, that policy will, if covered, provide primary coverage for the agent. Real’s E&O policy, if covered, will provide secondary coverage. 

What is the difference in policies? 

Certain states legislatively require that agents carry errors and omissions (E&O) insurance that carry specific terms, such as a limit on the deductible. Real’s E&O policy provides coverage to all affiliated agents of Real with terms which typically do not comply with legislative requirements for E&O coverage for agents in Kentucky, Louisiana, Mississippi, and Tennessee, for example. 

Will I be reimbursed for the added E&O policy from Rice?

No. Agents working in states that require state-specific errors and omissions (E&O) insurance coverage will be responsible for obtaining and paying for that policy.  

The low E&O fee that is included in each transaction does not directly pay for that agent’s policy; instead, the sum of all fees is applied toward Real’s company-wide policy that covers all agents. By charging a minimal fee on each transaction, Real is able to keep fees low across the board for all agents.

How would I show proof to the State of Tennessee that I purchased my own E&O policy? 

Rice Insurance typically will provide the state a list of those individuals who have

purchased policies. 

Where do I go to purchase an individual E&O policy approved by the State of Tennessee?

Rice Insurance Services, Tennessee Real Estate Commission’s Group Policy

CRES Tennessee Real Estate Errors and Omissions Insurance

What are the procedures for reporting an E&O claim?

1. Notify your primary E&O carrier (i.e. Rice or CRES)

2. Notify your Real State Broker for Tennessee by emailing tnbroker@therealbrokerage.com.