AI is quietly transforming real estate — from listing descriptions written by chatbots to automated valuations and digital marketing campaigns. These tools are fast, powerful, and everywhere. But with innovation comes a new kind of exposure:
What happens when AI gets it wrong — and your firm is held liable?
Most real estate E&O policies weren’t written with AI in mind. That’s a problem.
Where AI Is Creating Legal Gray Areas
Agents and brokerages are already using AI tools for:
- Writing property descriptions
- Estimating home values
- Drafting email replies and marketing content
- Automating communication with clients
These tools can introduce risks like:
- Inaccurate or misleading property details
- Automated valuations that miss key features
- Biased or non-compliant language in client-facing materials
- Errors that lead to financial loss — and lawsuits
If a client claims they relied on inaccurate AI-generated information, your firm may still be on the hook — and your E&O policy might not be prepared to cover it.
Does Your E&O Policy Account for AI-Driven Errors?
Most standard E&O policies were written before generative AI became common. That means:
- Coverage for AI-generated content may be unclear or excluded
- Defense support might not apply if the “error” originated from a third-party tool
- Policies may need endorsements or updates to reflect new risks
Now is the time to review how your firm is using AI — and whether your insurance reflects that reality.
Stay Ahead of the Risk Curve
At IMA, we help real estate brokerages evaluate and adjust their coverage for a tech-driven future. That includes:
- Reviewing E&O policies for exclusions or outdated definitions
- Helping implement best practices for AI tool usage
- Partnering with carriers that understand emerging risks
AI can be a powerful advantage — but only if you manage the risk as carefully as you manage the innovation.
Let’s connect for a quick conversation about how AI is impacting your firm — and how to ensure your E&O coverage is keeping up. Download a pdf of this article here.
