What is a key characteristic of Errors and Omissions Insurance in Texas?

Errors and Omissions Insurance (E&O Insurance) in Texas is primarily designed to protect agents and brokers from legal claims that may arise in relation to the professional services they provide. This type of insurance is particularly crucial in the real estate industry due to the various complexities and potential legal issues that can occur during transactions. The coverage typically focuses on mistakes or omissions that could lead to financial losses for clients, including failures to disclose important information or errors in contractual obligations. This protection facilitates agents in performing their responsibilities while reducing the financial risk associated with potential lawsuits stemming from their professional activities.

The other options do not accurately reflect the essence of E&O Insurance. While some states may have specific requirements regarding insurance for brokers, it is not universally mandated by law in Texas for all brokers. Likewise, E&O Insurance is not limited to just licensed real estate agents as it is also available to various professions that provide professional services. Lastly, this insurance does not cover all personal injuries; it is specifically tailored to address professional liabilities arising from errors and omissions rather than addressing personal injury claims, which fall under different types of insurance policies.