If a licensee opts for their own errors and omissions insurance, what requirement must it meet?

The correct answer is that the licensee's own errors and omissions insurance must be equivalent to or better than the group's plan. This requirement ensures that regardless of whether a licensee chooses to go with a group plan or secure their own coverage, the level of protection provided must meet or exceed the standard set by the group insurance policy.

This is important because it safeguards both the licensee and their clients by ensuring that there is sufficient coverage for errors and omissions that may occur in the course of providing real estate services. By establishing that personal insurance must be at least as robust as the group plan, regulators aim to maintain a consistent standard of risk management within the industry.

Cheaper options or those with less coverage could leave the licensee exposed to significant liabilities, which could jeopardize both their business and the interests of their clients. Additionally, insurances with no deductibles don’t necessarily guarantee that the coverage itself is adequate, which is why the focus is on the equivalency or superiority of coverage.