If a licensee chooses a different errors and omissions insurance plan, what must that plan be equivalent to?

When a licensee selects a different errors and omissions insurance plan, it is essential that this plan be equivalent to or better than the group plan provided by the brokerage. This requirement ensures that the licensee maintains a level of coverage sufficient to protect against potential liabilities associated with real estate transactions.

Selecting a plan that is equivalent means it must cover the same types of risks and provide similar limits on coverage as the group plan. If the chosen plan is better, it could offer higher coverage limits, lower deductibles, or additional benefits that enhance the protection afforded to the licensee. This stipulation is in place to maintain a standard of care within the profession and to ensure that all licensees have adequate coverage to protect themselves and their clients.

Choosing a plan that is merely cheaper does not guarantee adequate protection, as the coverage limits and types of risks insured can vary significantly. Therefore, it is not sufficient for the alternative plan to just be less expensive; it must also provide appropriate levels of coverage comparable to the existing group plan.