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Housing, 'Robo' Crises Put Spotlight On Need For E&O Insurance

The collapse of the housing market and subsequent foreclosure crisis have led to an increase in litigation, causing people throughout the legal, financial and real estate industries to take a closer look at errors and omissions insurance.

Highlighting that trend, a recent article in The Legal Description discussed the importance of E&O insurance in the title industry. “Poorly conducted title searches along with ill-conceived mortgage products and the resulting ‘robo-signing’ claims and foreclosure debacle, focused closer attention on all real estate transactions,” author Andrea Golby wrote.

The article offered the following tips for those considering E&O coverage:

  • Find an agent that specializes in the type of coverage for your industry. The NNA’s E&O site provides specifics for Notaries.
  • When purchasing a policy, be sure to obtain the proper amount of coverage for the type of acts you perform. For example, NSAs handling high value real estate closings may want to carry a larger policy.
  • Carefully consider the amount of deductible when applying for coverage. (NNA policies do not have a deductible.)
  • Understand the extent of the policy and what it provides. E&O insurance covers negligent acts only — not those that are deliberate or fraudulent.
  • If your employer carries E&O insurance, understand the limits. It may not cover you for notarizations you perform outside of work hours or for non-work clients.

The cover story in the November issue of The National Notary details information about E&O coverage for Notaries — why it is needed, how it differs from a surety bond, how to determine how much to carry, and where to purchase it.

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