Why Real Estate Title Agents Need Error and Omission Insurance
In fact, it doesn’t matter if you’ve been in business for quite some time or are new to the real estate industry, the risks you face on a daily basis, from errors in closing costs and payments to failing to meet customer expectations, make it a prime target for lawsuits. Even if you are exempt from all claims, the fees spent on defense, the time spent away from your business, and the added stress of dealing with the situation can be costly. Without the proper coverage, real estate agents can risk their professional and financial future.
In addition, the role of the title industry is to protect 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 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, from the impact of a lawsuit incurred as a result of Omissions and errors of title agents and fraudulent transfer activities.
This insurance covers all costs incurred as a result of an emerging lawsuit alleging alleged errors in the title documentation process, including title searches and escrow. Under this coverage, the insured is compensated in the event of final settlement up to the policy limit, as well as compensation for defense costs.
Title Agent Errors and Omissions Insurance under the Fidelity-Pak Program
Title agent errors and omissions insurance coverage under the Fidelity-Pak program provides a wide range of comprehensive error and omission coverage for real estate title agents, including:
Claims related to coverage of defects or deficiencies
Sometimes the real estate process can be damaged due to a defective or non-marketable title, also known as a title defect, which means that there is an omission, error or other complication related to the 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 to ensure 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.
Claims related to defect or deficiency insurance cover claims related to claims for defects or deficiencies resulting from a deficiency or defect not recorded in public.
Consumer Financial Protection Bureau (CFB) Affairs Coverage
The Consumer Financial Protection Bureau protects consumers from aggressive, unfair, or deceptive practices and takes action against businesses that violate 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 indeed violated federal consumer financial laws, it could result in legal proceedings.
The Consumer Financial Protection Bureau Affairs Coverage helps with costs incurred as a result of Consumer Financial Protection Bureau affairs. 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 conducted or received by the CFPB.
Claims caused by independent contractors
Claims caused by independent contractors cover the Insured against a claim caused by independent contractors.
Occasionally, you may need to hire an independent contractor to help you with 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 the accident result in damage.
Coverage of previous events
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 when services are provided and when claims are made 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.
Bank transfer coverage by fraudulent email (third parties)
Under the Fraudulent Wire Transfer Coverage, compensation is paid on behalf of the Insured, insured sums are legally required to pay up to $ 1 million for a covered loss as a result of an employee transferring funds as collateral from an account of the Insured in reliance on fraudulent email instructions released from a criminal claiming to be a legal party to the transaction.