Being an abstractor, title agent, escrow/closing agent, notary public, or title examiner is a complex responsibility with customers expecting superior performance and error-free results. For example, a loan closer performed a closing for a refinance. Unfortunately, he calculated the payoff amount of the existing mortgage himself instead of obtaining it from the lender. He was incorrect, the existing mortgage was not satisfied, and his E&O insurer settled for a total loss of $35,600. Without errors and omissions insurance, he would have been liable for that amount himself.
Errors & Omissions Insurance Protects Your Title Agency
Almost any firm or individual who improperly performs services can cause a client to suffer an economic loss. Mounting a defense of your actions is expensive. The impact of even a baseless claim can be devastating. Would your company have the resources and expertise to defend against such a claim? Your company’s survival and your personal financial security depend on protecting yourself against the impact of a lawsuit.
Title Agency E&O Covers
This professional liability insurance covers legal defense costs and any resulting judgments against you, including court costs, up to the coverage limits of your policy.
Often a claim or lawsuit may not involve a clear error or omission on the part of the title agent, abstractor, or escrow agent. There could be a title hazard on a property, but the title insurer may not respond to the claim because it isn’t covered. Any suit by the policyholder against the insurer will likely name the title agent.
E&O Is Different Than General Liability
Errors and Omissions insurance coverage is not provided by a Commercial General Liability policy. Commercial General Liability does not provide coverage for errors, contract performance disputes, or any other liability issues. Appraisers who have General Liability without Professional Liability (Errors & Omissions) coverage are taking a serious risk.