Real estate appraisers rely heavily on Errors and Omissions (E&O) insurance coverage for financial security. E&O protects professionals against costly lawsuits arising from inaccuracies or mistakes in property valuation; from minor issues like misidentifying properties to major ones like overlooking zoning issues – lawsuits that arise can cause severe losses and damages.
Under any scenario, even if a lawsuit against an insured is ultimately dropped, the cost of defending this type of claim can quickly become overwhelming. Therefore, having adequate E&O insurance for real estate appraisers and appraisal businesses alike is absolutely crucial and represents an invaluable investment opportunity.
Many states and regulatory bodies mandate E&O coverage as an integral element of appraiser licensing requirements, while lenders frequently prefer working with appraisers who carry this important form of coverage as it shows a commitment to professionalism and accountability. Unfortunately, E&O insurance isn’t cheap – many appraisers struggle to afford its expenses.
As such, some appraisers opt for “no frills” E&O policies from some of the larger national insurers, promising low rates and satisfying lender requirements while at the same time creating coverage gaps when an appraiser changes carriers – as most E&O policies operate on a claims made basis and any discipline matters must be reported immediately upon receiving first notice of them; otherwise this could result in non-renewal of coverage down the road if discovered later on. However, this option comes at a considerable cost: no frills” policies created coverage gaps between carrier changes due to claims made policies created when changing carriers due to claims made policies written on claims made basis and require any discipline matters to be reported immediately upon receiving first notice, potentially leading to non-renewal of coverage altogether when something like this occurss later discovered!
However, appraisers with an extensive history of serious discipline will most likely be denied new E&O policies because their insurer has determined they represent a greater financial risk for them than someone who has not.
Therefore, any appraiser considering switching carriers must carefully consider their options and weigh their advantages and disadvantages of each. Furthermore, it is vital that any appraiser applying for an E&O policy answers each of its questions honestly and completely, including any prior disciplinary actions they have been subject to.
OREP offers E&O policies tailored specifically for the real estate appraisal industry, with flexible premium payment plans that help our clients manage expenses more easily. In addition, our combination policy option enables appraisers to cover both their E&O and general liability needs with one affordable premium payment plan.