Free Pennsylvania Real Estate Practice Exam Practice Question
Errors and Omissions (E&O) coverage helps to:
Correct Answer: A
Rationale: Errors and Omissions (E&O) coverage is designed primarily to safeguard brokers and their firms against claims of negligence or inadequate work. This protection is crucial in a profession where mistakes can lead to significant financial consequences.
Option B, protecting the buyer, is not the main focus of E&O coverage; buyers typically rely on their own insurance or contractual protections. Option C, protecting the seller, is also inaccurate, as sellers are not the primary beneficiaries of E&O policies. Lastly, option D misrepresents E&O’s purpose, which does not extend to post-closing risks for sellers. Thus, E&O coverage is fundamentally about risk reduction for brokers and their firms.
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