Why Real Estate Title Agents Need Errors and Omissions Insurance
In fact, it doesn’t matter if you’ve been in business for quite some time or if you’re new to the real estate industry, the risks you face on a daily basis, from errors in closing costs and payment amounts to not meeting the expectations of the client, make him a prime target of lawsuits. Even if you are cleared of all claims, the fees spent on defense, the time you spend away from your business, and the added stress of dealing with the situation can be costly. Without the proper coverages, real estate agents can put their professional and financial future at risk.
In addition, it is the role of the title industry to safeguard the client’s escrow and other funds by providing a means for the safe transfer of their real estate in the industry. If an error or default occurs during this transaction, the agent is responsible for any damages incurred as a result of the error or default.
Title agent errors and omissions insurance protects title agencies, including escrow agent, closing cost agent, title finder and more, against the impact of a lawsuit incurred as a result of omissions and title agent errors and fraudulent transfer activities.
This insurance covers all costs incurred as a result of an emerging lawsuit claiming alleged errors in the title documentation process, including title searches and escrow. Under this coverage, the insured is indemnified in the event of final settlement up to the limit of the policy, as well as compensation for defense expenses.
Title Agent Errors and Omissions Insurance under the Fidelity-Pak Program
Title Agents Errors and Omissions Insurance Coverage under the Fidelity-Pak Program provides a wide range of comprehensive errors and omissions coverage for real estate title agents, including:
Claims Related to Defect or Deficiency Coverage
Sometimes the real estate process can go awry due to a faulty or non-marketable title, also known as a title defect, which means there is an omission, mistake, or other complication related to ownership of the property that makes it unsuitable for sale to a valid buyer.
Typically, as part of the settlement process under a title contract, the buyer will pay the title company or attorney to search for title to the property and ensure that the seller has valid, marketable title to transfer without defects of title to protect the right of the buyer. to the property However, sometimes important details related to the property are not recorded in state and county records, preventing certain information from being known, putting the agent at risk.
Defect or deficiency claims insurance covers claims related to defect or deficiency claims resulting from a deficiency or deficiency not publicly recorded.
Coverage of Consumer Financial Protection Bureau (CFB) Matters
The Consumer Financial Protection Bureau protects consumers from abrasive, unfair or deceptive practices and takes action against companies that break the law, such as predatory lending.
If a consumer files a complaint against your business with the CFPB, and after an investigation, the CFPB decides that your business has in fact violated federal consumer financial laws, legal proceedings could result.
Consumer Financial Protection Bureau Issues Coverage helps with costs incurred as a result of Consumer Financial Protection Bureau issues. Under this coverage, Insureds receive sub-limit coverage of up to $150,000 for relevant attorneys’ fees, costs and expenses, including civil investigation, hearing, subpoena or civil action made or received by the CFPB.
Claims Caused by Independent Contractors
Loss caused by independent contractors insurance covers the Insured against a loss caused by independent contractors.
Occasionally you may need to hire an independent contractor to assist you in your real estate business. During these times, it is important to verify that the contractor is covered by insurance, which will cover damages if the contractor’s mistakes or accidents cause damage.
Coverage of previous acts
Title agent errors and omissions insurance covers prior acts. Coverage is a feature of liability policies that extends coverage of insurable events to dates prior to the purchase of the policy. In other words, it covers the time between the provision of services and the filing of claims as a result of those services. Under this coverage, all claims caused by wrongful acts after the retroactive date and before the end of the policy period are covered.
Fraudulent Email Wire Transfer Coverage (Third Party)
Under Fraudulent Email Wire Transfer Coverage, compensation is paid on behalf of the Insured, those sums insured are legally required to pay up to $1 million for a covered loss resulting from an employee transferring escrow funds from a Reliant Insured’s account with fraudulent email instructions released from a criminal claiming to be a legal party to the transaction.