A broker carries a policy intended to help with defense costs and covered claims arising from professional mistakes rather than intentional fraud. What type of policy is this?
Correct Answer
A) Errors and omissions insurance
Errors and omissions insurance is correct because the facts match insurance commonly used to help protect licensees against claims arising from professional mistakes or negligent acts. That is the best description of the relationship, right, or legal concept tested here.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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A listing agreement creates an agency relationship between:
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- → A real estate team receives a referral from a past client. The team leader assigns the referral to a team member. The team member shows the buyer several properties. Who is the buyer's agent?
- → A property manager receives a maintenance request from a tenant who reports a broken heater during winter. The property manager delays the repair for three weeks, and the tenant suffers property damage from frozen pipes. Who may be liable for the damages?
- → A real estate team consists of a team leader (licensed broker) and three licensed sales agents. A buyer contacts one of the team agents about a listing held by another team agent. What agency concern arises in this situation?
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- → A commercial broker represents a landlord in leasing office space. During negotiations, the tenant discloses to the broker that she would pay up to $35 per square foot, even though the listed rate is $30. What must the broker do with this information?
- → A commercial property owner hires a broker to find a tenant for a 50,000 square-foot warehouse. The broker locates a suitable tenant and negotiates a 10-year lease. The owner pays the broker a commission based on the total lease value. What type of agency did the broker hold?
- → A commercial tenant is negotiating a five-year lease for retail space. The tenant hires a tenant representative broker to negotiate lease terms on the tenant's behalf. What agency relationship exists between the tenant and the tenant representative?
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