Real estate appraisers play a pivotal role in the real estate industry by providing impartial assessments of property values to promote fair transactions and market stability. But their profession entails its own risks – with errors having serious repercussions that may cost real estate appraisers financially in lawsuits for professional negligence claims. Errors & Omissions Insurance can protect real estate appraisers against these liabilities by covering professional negligence lawsuit costs.
Brauner: E&O coverage can help cover legal fees should you be accused of misrepresenting how much a property is worth or failing to disclose information that could reduce its value, such as whether it has a septic system instead of public sewer or is located on flood zone land. Unfortunately, E&O coverage usually does not cover damage caused by property damage or environmental issues like asbestos or lead paint on a property; this type of insurance should either be purchased separately through its own policy or included as part of your business owner’s policy which should always include workers’ compensation insurance as part of its total coverage.
Real estate appraisers frequently face allegations regarding valuation issues. Lenders might file a claim against an appraiser for overstating a mortgaged property’s value to secure loan approval, while sellers could sue an appraiser for undervaluing their home in order to increase sale speed. Many of these disputes can be settled through mediation or arbitration, however should one arise that needs legal intervention, having an E&O policy could protect both parties financially.
No matter the cause of a claim, you should notify your insurer as soon as possible to protect future policies from being negatively impacted. Also take the opportunity to review any exclusions and tail options of your E&O policy that could limit coverage so that you fully understand what it covers and doesn’t cover.
Real estate appraisers frequently worry that state disciplinary actions against them could adversely impact the E&O coverage that provides their livelihood. Should an insurance company learn of any disciplinary proceedings taken against you, their premium could increase significantly or they may choose not to renew your policy altogether.
Errors and Omissions Insurance (E&O) coverage is essential for all real estate appraisers. If you don’t already possess one, now would be an opportune time to shop around for one that offers comprehensive coverage at reasonable rates and 24/7 online access to policies and certificates of insurance from a reputable provider like Victor Risk Advisory’s state-of-the-art E&O program provides real estate appraisers with modern yet flexible coverage needed in today’s real estate market. Contact us to learn more or take a free risk evaluation consultation service today – contact us and gain industry insights, claims scenarios insights as well as risk mitigation resources from our experts today!