Final answer:
Real estate brokers usually obtain Errors and Omissions Insurance to protect against claims of negligence or inadequate work, as their professional mistakes can be costly for clients.
Step-by-step explanation:
Real estate brokers typically obtain Errors and Omissions Insurance, which is a form of professional liability insurance. This insurance helps protect real estate professionals from claims of negligence or inadequate work. It is particularly important because, in their line of work, a simple mistake or omission can lead to significant financial losses for their clients. For example, if a broker fails to disclose a property defect, or incorrectly handles transactional documents, the client could face costly legal disputes or property devaluation. Unlike health insurance, car insurance, or house or renter's insurance, which are intended to cover more tangible, often immediate risks and damages, Errors and Omissions Insurance is about professional service and advice. Real estate brokers may also be required to hold an occupational license, indicating they have met certain education or examination standards. They pay a premium to their insurance company, joining a risk group of similar professionals.