The short version
- Idaho mandates E&O. Idaho Code 54-2013 requires active licensees to carry errors and omissions insurance; the Idaho Real Estate Commission's rules set minimums of $100,000 per occurrence and $300,000 aggregate for individuals and $500,000 and $1 million for firms, not including defense costs.
- Washington does not, but the duties are strict. We found no E&O requirement for Washington licensees, while RCW 18.86.030 imposes duties to all parties that cannot be waived, including reasonable skill and care and disclosing known material facts.
- Most claims are about disclosure. Undisclosed defects, square footage, boundaries, and representations in listings are the classic E&O claims.
- Wire fraud is now a brokerage risk. A hacked agent email can send a buyer's down payment to a criminal. That calls for cyber coverage with social engineering and liability, not just E&O. See real estate closing wire fraud.
- Check whose policy covers whom. Agents are often independent contractors; confirm whether the brokerage policy covers each agent and their side activities.
Licensing and insurance rules
| Washington | Idaho |
|---|
| License | Required to act as a real estate broker, managing broker, or firm (RCW 18.85.331) | Required to act as a real estate broker or salesperson (Idaho Code 54-2002) |
|---|
| Mandatory E&O | None found | Required for active licensees (Idaho Code 54-2013) |
|---|
| E&O minimums | Not applicable | Individual: $100,000 per occurrence, $300,000 aggregate. Firm: $500,000 and $1 million. Defense costs not included; deductible no more than $3,500 (IDAPA 24.37.01) |
|---|
| Group policy option | Not applicable | Licensees may use the Commission's group policy or buy independent coverage that meets the minimums |
|---|
| Trust funds | Funds a licensee controls in a transaction are trust funds, kept separate (RCW 18.85.285) | Entrusted money goes into a trust account by the next banking day (Idaho Code 54-2041, 54-2045) |
|---|
Washington broker duties that drive claims
RCW 18.86.030 lists duties a broker owes to the principal and to all parties in a transaction, which may not be waived. Among them:
| Duty | Claim it can lead to |
|---|
| Exercise reasonable skill and care | Negligence in pricing, paperwork, deadlines, or advice |
|---|
| Deal honestly and in good faith | Misrepresentation and fraud allegations |
|---|
| Present all written offers and communications in a timely manner | Lost-deal claims |
|---|
| Disclose all existing material facts known to the broker and not readily ascertainable to a party | Undisclosed defects, a frequent source of E&O claims |
|---|
| Account in a timely manner for all money and property received | Earnest money and trust disputes |
|---|
The statute does not impose a duty to investigate matters the broker has not agreed to investigate, which makes clear listing language and written disclaimers important.
What a real estate E&O policy should include
| Feature | Why |
|---|
| Limits above the minimum | Idaho's $100,000 per occurrence is a floor; defense costs alone can approach it |
|---|
| Defense outside the limit, where available | Idaho's minimums do not include defense costs; check what your policy does |
|---|
| Fair housing and discrimination coverage | Often limited or excluded; claims can be costly |
|---|
| Property management activities | If you manage rentals, confirm they are covered (see property managers) |
|---|
| Lockbox, showing, and open house incidents | Some policies add coverage for items missing after showings |
|---|
| Cyber and social engineering | Wire fraud and client data, usually excluded from E&O |
|---|
| Prior acts and tail | Claims arrive after closing; keep coverage continuous and buy a tail when you retire |
|---|
The coverage program for a brokerage
Where agents and brokerages get caught
| Gap | What happens |
|---|
| Wire fraud with E&O only | Most E&O policies exclude or limit cyber and fraud claims |
|---|
| Agents assumed to be covered | Independent contractor agents may need their own coverage, or the brokerage policy must name them |
|---|
| Side activities | Property management, development, or investing outside the brokerage may not be covered |
|---|
| Driving clients | Personal auto policies may limit business use; hired and non-owned auto protects the brokerage |
|---|
| Idaho minimum only | $100,000 per occurrence, with defense costs on top, can be exhausted by one dispute |
|---|
Sources
This page is general information, not legal advice. Rules were checked against the statutes and rules in October 2026; confirm current requirements with the Department of Licensing or the Idaho Real Estate Commission.