Which of the following is true about ERRORS and OMISSIONS insurance in real estate?

The premise that ERRORS and OMISSIONS insurance is designed to protect against negligence and unintentional mistakes is accurate. This type of insurance specifically provides coverage for professionals in the real estate industry—including agents and brokers—against claims related to negligence, misrepresentation, omission, or inadequate work. Essentially, it serves as a safeguard for practitioners who may inadvertently make errors in their services, such as failing to disclose important property information or providing misleading advice.

This protection is vital given the complexities involved in real estate transactions, where small mistakes can lead to significant financial losses for clients and legal repercussions for agents. By having this coverage, real estate professionals can operate more confidently, knowing they have a safety net in place for mistakes that may occur in the course of their work. This insurance aims to mitigate the potential financial fallout from legal claims, thus securing the professional’s livelihood and reputation.

In contrast to this, the other options do not accurately describe the fundamental nature or requirement of ERRORS and OMISSIONS insurance in the real estate sector.