Errors and Omissions Insurance
Errors and omission Insurance is required for all active brokers, broker associates, property managers, real estate auctioneers, residential rental agents and salespeople. A group policy for errors and omissions Insurance is offered by the South Dakota Real Estate Commission (SDREC) through Rice Insurances Services Company, LLC (RISC).
As of October 2016 the South Dakota Real Estate Commission office will no longer process group E & O renewals. Licensees will need to contact RISC to pay for their group insurance policy. Please visit the RISC website to renew or apply for the group E & O insurance policy.
For information on what the policy covers and endorsements, visit the RISC website for specific information on the South Dakota errors and omissions insurance policy.
Real estate licensees who purchase errors and omissions insurance coverage other than the group policy provided by Rice Insurance Services Company are being reminded those providers must be an admitted carrier in South Dakota or the state in which the licensee resides.
Administrative Rule of South Dakota (ARSD) 20:69:15:06.01 states, 'A provider issuing insurance coverage pursuant to South Dakota Codified Law (SDCL) 36-21A-122 must be an admitted carrier in South Dakota or in the state in which the licensee being certified resides. All activities contemplated under SDCL Chapter 36-21A must be covered.' Licensees who have their errors and omissions policies with companies that are not admitted carriers in South Dakota or the state in which the licensee resides are in violation of license law and administrative rules.
The South Dakota Real Estate Commission has discovered instances whereby licensees have been paying premiums to companies that are not actually admitted carriers in South Dakota or the state they live in. The concern is that this could create some serious liability problems for licensees in the event a claim is made against their errors and omissions policies.
Licensees who are not covered under the group policy are urged to check with their insurance providers to ensure their provider is an admitted carrier. This information can be verified on the South Dakota Division of Insurance website or by calling them at 605.773.3563.