A Michigan real estate broker must maintain errors and omissions insurance of at least:
Question & Answer
Review the question and all answer choices
$50,000
There is no $50,000 E&O requirement in Michigan law because Michigan does not mandate E&O insurance at any coverage level for real estate licensees. This figure is a distractor designed to test whether candidates know the correct answer is that no requirement exists, not that a specific dollar amount applies.
$100,000
A $100,000 E&O requirement does not exist under Michigan real estate licensing law. While $100,000 might seem like a reasonable minimum coverage amount, Michigan LARA has not established any mandatory E&O insurance threshold, making this answer factually incorrect.
No E&O requirement exists
$250,000
A $250,000 E&O requirement does not exist in Michigan real estate law. This higher figure is another distractor; no Michigan statute or administrative rule imposes any mandatory E&O insurance requirement on real estate licensees at any dollar amount.
Why is this correct?
Michigan's occupational code and the rules promulgated by the Michigan Department of Licensing and Regulatory Affairs (LARA) do not include any provision requiring real estate brokers or salespersons to maintain errors and omissions insurance as a condition of licensure. This is a deliberate legislative choice, distinguishing Michigan from states like Colorado, Idaho, and Nebraska that do mandate E&O coverage. While the Michigan Association of REALTORS® strongly recommends E&O insurance as a best practice, the absence of a legal requirement is the correct answer and a frequently tested Michigan-specific fact.
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