Colorado License LawIntermediateColorado Exam
The 'E&O' (errors and omissions) insurance required by Colorado protects a broker against:
AOnly intentional fraud claims
BFinancial losses from negligent errors or omissions in the performance of professional dutiesCorrect
CPhysical injuries that occur during property showings, which reflects common industry practice
DClaims from competing brokers
Why Financial losses from negligent errors or omissions in the performance of professional duties Is Correct
Answer B: Financial losses from negligent errors or omissions in the performance of professional duties
Errors and omissions insurance protects brokers against financial losses from negligent professional errors or omissions — such as failing to disclose a material fact, missing a contract deadline, or providing incorrect information. It does not cover intentional wrongdoing.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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