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A Look at Errors and Omissions Insurance for Title Agents


A Look at Errors and Omissions Insurance for Title AgentsReviewing Professional Liability Insurance for Title Agents

As specialists in professional liability insurance, the coverage we provide for each profession reflects their services and the specific exposures they face. At Axis Insurance Services, LLC, we provide Errors & Omission (E&O) insurance for many types of professions – from insurance agents and attorneys to architects and engineers, to name a few. We also write specialized E&O coverage for a broad spectrum of real estate professionals, including Title Agents – a critical coverage especially in the wake of increased scrutiny in foreclosure cases due to the myriad of problems that have surfaced in the last several years.

E&O coverage for Title Agents provides protection from losses as a result of lawsuits or claims due to an alleged error in any part of the title documentation process, such as searching, escrowing, etc. Coverage provides indemnification in the event of final settlement, up to the policy limit, as well as payment for defense costs. Allegations can involve failure to find mortgage assignment; failure to find land subdivision; failure to find deed entry or deed fraud; failure to find will and probate entry; failure to find liens, encumbrances, easements or encroachments; an incomplete review of title; improper or inadequate documentation; a search performed on wrong parcel; or breach of contract.

Coverage is written on a claims-made basis, which means that a claim has to be reported during the policy period. Retroactive coverage is available on some claims-made policies, which is when the coverage would begin. Therefore it is very important to note both the policy’s retroactive coverage date and when the current policy period expires. In order to avoid gaps in coverage, coverage must be in force when the claim is made and it must date back to the retro date. The retro date is typically found on the policy’s declaration page, but can be listed as an endorsement.

It’s also important to understand the policy language and how professional services are defined. Policies differ from one insurer to another, therefore language may be included that doesn’t apply to a specific business. As a specialist in Title Agent E&O insurance, we can go through this with you.

Who is covered is just as important as what is covered in the policy. Some policies may not cover work from independent contractors; some do so but also want the contractor to have his or her own insurance, while other insurers mandate what limited liability coverage they have. Again, this should be reviewed in detail.

Also, be aware that there is no coverage after the expiration date of a policy unless an extended reporting period (ERP) endorsement is added. The ERP endorsement acts as a tail to the policy, continuing coverage into the future for work done in the past. An ERP is the only way of extending the reporting period provisions under an E&O policy for a future claim on a policy that’s been canceled. For an additional premium, this provides coverage for Title Agents leaving the industry – retiring, for example – or closing shop – and is available usually for a period of time, such one or three years.

We would be happy to discuss the type of coverage available for Title Agents in more detail with you. We can write coverage for Commercial Title Agents, Escrow Agents, Abstractors, and Mortgage Processors. Just give one of our professionals at Axis Insurance Services a call at (877) 787-5258

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Blogged on: July 16, 2013 by Mike Smith
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