Question 6

A licensee whose license is in retired status does not need to carry errors and omissions insurance.

A licensee whose license is in retired status is not actively engaged in real estate transactions, which exempts them from the requirement to maintain errors and omissions insurance.

A) A principal broker of a corporate real estate firm.

A principal broker must carry errors and omissions insurance as they are actively involved in overseeing real estate transactions and managing the firm’s activities. This insurance protects against potential claims arising from their professional services.

B) A licensee whose license is in retired status.

This option is correct because a licensee in retired status is not conducting real estate business, and therefore, is not required to maintain errors and omissions insurance.

C) A licensed affiliate broker whose firm carries liability insurance for all employees.

Even if a firm's liability insurance covers employees, licensed affiliate brokers are still required to carry their own errors and omissions insurance to protect against claims specifically related to their actions in real estate transactions.

D) An affiliate broker who works as a property manager and deals only with leasing contracts.

This affiliate broker is still engaged in real estate activities, which necessitates carrying errors and omissions insurance to shield against any claims that may arise from their property management duties and leasing contracts.

Conclusion

In summary, a licensee whose license is in retired status is exempt from the requirement to carry errors and omissions insurance, as they are not actively involved in real estate transactions. All other options, including active brokers and those engaged in property management, are mandated to maintain this insurance to protect themselves from potential liabilities.