The insurance companies that paid six homeowners nearly $2 million over a brush fire have sued the owners of the property the fire started on and the real estate agent involved with the property. The allegations state that the owners failed to maintain the property in accordance with the local code -allowing the overgrown brush to catch fire and spread. Since the owners were living out of state and had engaged a real estate agent to sell the property, the allegations go on to explain the real estate agent had responsibility to maintain the land and failed to perform their duty.
This case brings many risk factors to light, explains BrokerLiability.com. Not only does the agent need to understand the client expectations and legal duties as they engage to sell a property (such as whether they have responsibility to maintain the property), but also that claims can come from a number of sources – even an insurance company. It is important for each real estate firm to hold professional liability insurance and to periodically review its adequacy. Contact a broker to begin a pre-renewal review of your firm’s current coverage.