What is Contingent Liability?

The Contingent Liability endorsement (also known as "Open House" Coverage) is generally excluded from Real Estate E&O policies. The endorsement provides some bodily injury and other coverages that an E&O usually does not – and only when a Commercial General Liability policy is not in place - such as an injury resulting from a negligent act on your behalf.

Contingent Liabilities are potential debts that could occur based on future events, such as lawsuits or investigations, which are common in real estate.

From a financial perspective, businesses usually reserve funds for these possible liabilities. For instance, if you're sued and it seems you might lose, you'd account for potential costs in your financial records. This means you're preparing for future expenses, not that you owe money now.

There are exclusions to a Contingent Liabilities endorsement, such as motor vehicle liability, war, diseases, and issues unrelated to your insured services.