28-Feb-2008

Section 62-13-112 of the Real Estate Brokers' Act requires all principal and affiliate brokers to maintain errors and omissions insurance coverage. If a licensee fails to maintain the required insurance, TREC will deny the renewal of his/her license and may also take disciplinary action, such as a civil penalty, against the licensee.

Section 62-13-312(b)(15) of the Real Estate Brokers' Act requires principal brokers to adequately supervise all affiliate brokers associated with their firms. According to TREC Policy 07-002, if a principal broker fails to ensure that affiliate brokers under his/her supervision maintain errors and omissions coverage, TREC may find a violation of the Brokers' Act and fine the principal broker $1,000 per uninsured affiliate broker.

In the event an affiliate broker fails to renew his/her errors and omissions policy, a managing broker should "suspend" the affiliate broker from engaging in the practice of real estate until such policy is renewed and the renewal of his/her license can be verified. A managing broker should also notify the TREC of the affiliate broker's failure to renew his/her policy and the firm's suspension.