If you are interested in getting appraiser E&O insurance, you’re in the right place. Here, we will explore what E&O insurance is for appraisers, and we will explore the insurance options that are available to these individuals and to real estate agencies that employ real estate appraisers. Keep in mind that E&O insurance for real estate appraisers is essential as it helps cover them from potential liability problems.
Read on to get an understanding of insurance options for real estate appraisers, or skip directly to getting expert advice from an insurance professional local to you by
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What Does E & O Stand For?
E & O stands for errors and omissions insurance. This is a form of insurance that is categorized as “professional liability insurance.” It protects the individuals who work for a company or the individuals themselves from claims that may be made by their customers or clients.
Customers and clients have been known to make certain legal liability claims against independent works or companies for negative actions that the individual or company did while working for the customers or clients. They may also make a claim like this for so-called inadequate work that has negatively affected them.
Here is an example: An advertising executive is asked to create a logo for another company. They create the logo, and it is accepted by the customer, but later, it is found that — unknowing to the advertising executive — the logo is actually that of another company or very similar. If this happens, the advertising specialist would have been infringing upon the property rights of the business who had the original logo.
In this case, it is possible that the company who asked for the logo could sue the individual or the company for failing to perform their task correctly or for
overall negligence. On the other hand, it is possible for the company who had the original logo to sue the company as well.
This is an unfortunate situation, but E&O insurance would cover the advertiser and the advertising company in this case. The E&O area that the errors and omissions insurance would cover would be “copyright infringement” in this case.
On the other hand, negligent acts are usually also covered by errors and omissions insurance. Often, it is the case that negligent acts are accidental. But if a customer or client decides to sue for negligence because of financial losses or loss of property, etc., it can leave the individual with serious financial troubles. Companies can lose all of their assets or go bankrupt this way if they do not have E&O insurance.
What Is Appraisers Errors and Omissions Insurance?
Below, we will explore how errors and omissions insurance can help you and protect you if you are an appraiser for real estate properties. It can also protect your company if you own or operate a real estate agency and employ appraisers.
But before diving into this area, let’s explore what an appraiser is and what they do for work.
What Are Appraisers and What Do They Do?
Anyone who has ever sold a house, business, or property has had to work with a real estate appraiser. The job of the appraiser is to decide the current value of a given house, business, or property. The appraiser will need to go to the site and look at it in detail in order to come up with a value.
Most real estate appraisers do the following things when it comes to determining the value of a given property:
First, they will do a walk-through of every room on the property. This concerns the interior condition of the property. It will start at one end of the house or building and moved to the other. On the outside of the property, they will also walk the length of the perimeter and go about the property in order to determine what condition the exterior is in.
Additional amenities and features located on the outside of the property will also be examined in detail by the real estate appraiser. They will look at finished basements, swimming pools, decks, and other parts of the property. In addition to examining everything and taking notes on the look and condition of the location that they were hired or sent to appraise, the real estate appraiser will also be on the lookout for any safety code violations or health code violations.
Once the appraiser has gone physically to the property to examine it, they will also evaluate the market of the neighborhood or location where the property is to determine its current value and come up with an overall value of the property.
What Is Errors & Omissions Insurance for Appraisers?
Errors & omissions insurance is available specifically for real estate appraisers. If you are a real estate appraiser or if you own a real estate agency, you will want to have errors & omissions insurance to protect yourself from extreme financial loss.
If you find the right E&O plan for yourself or your real estate agency, you will be able to get a low premium rate, widespread coverage, and a low yearly deductible. Naturally, your errors & omissions insurance agent will be able to speak with you about your options.
What Is Liability?
One of the first things to understand about errors and omissions insurance is that it all centers on liability. For anyone in basically any business and even for everyday people who own homes or property, it is essential to know what liability is and to learn about it.
First of all, let’s define this word. Liability can be defined as a state of being fully or partially responsible for something. Most of the time, when it comes to the law and insurance, that “something” is something negative, such as financial loss, property damage, personal injury, or something else.
For example, if you own a restaurant, and there is a horrible snowstorm in the winter, it is possible that snow and ice may build up on the outside of your restaurant in the parking lot, for example. If this happens quickly, and you do not have time to go outside and shovel the snow and throw salt on the ice or ask another employee to do so, it is possible that someone might slip on the ice and hurt themselves badly.
This happens more than you think, and if someone does go to your restaurant and slip and fall like this, they could be seriously injured. They might break a limb or their hip, require surgery, or become disabled. Serious injuries caused by things like this often cost thousands of dollars or even hundreds of thousands of dollars to the individual who was injured, and this can lead to the individual to sue. The party they will sue is you and your restaurant in order to get damages for their injuries and financial losses.
Real estate appraisers, like restaurant owners, can face similar problems with individuals, companies, or other parties who have lose money or experienced damage as a result of something you did as an appraiser.
What Liability Problems Do Real Estate Appraisers Often Face?
The main reason why real estate appraisers require appraiser E&O insurance is because of potential liability issues. As stated above, if someone sues you or your real estate agency for liability, you can potentially lose everything.
All real estate agents should have errors and omissions insurance. No matter how well you perform your job as a real estate appraiser, it is possible that someone may end up suing you. Here are some of the instances in which a real estate appraiser may need liability insurance:
- Claims against a real estate appraiser for appraising a property at the wrong value
- Claims against a real estate appraiser for property that may be associated with pollution
- Claims against a real estate appraiser for a situation that involves the death or bodily harm of an individual and the subsequent financial losses
- Claims against a real estate appraiser for damage that was caused on the property being appraised and the subsequent financial losses
What Should You Do to Go About Obtaining Appraisers Errors and Omissions Insurance?
If you are interested in obtaining appraisers errors and omissions insurance, this type of insurance is available at numerous commercial insurance agencies. You can work with a commercial insurance agency to find an errors and omissions insurance plan that will meet your needs.
The best insurance agencies can get you same day coverage for yourself or your real estate agency. In most cases, if you are even considering this type of insurance, you’ll want to get this right away.
Don’t Be Fooled by Cheap “No-Frills” Insurance Options
You’ve probably seen insurance agencies putting out marketing efforts that advocate for no-frills errors and omissions insurance policies. These so-called no-frills policies tell you that you will be able to meet the basic requirements of your plan, but is this really all you want from your appraiser’s errors and omission insurance?
Look out for these options because they usually don’t cover much, and in the event that you would really need errors and omissions insurance, having one of these policies won’t really help you all that much.
The Advantages of Finding a Great Agency Offering E&O Appraisers Insurance
There are numerous advantages to shunning the no-frills policies and going for an error and omissions insurance policy that will truly protect you in the event of a lawsuit. You want to make sure that you are protected at all times with your plan, and working with the top-tier insurance agencies will ensure this.
With the best E & O insurance policies, you often have the option of choosing from a residential program or a standard program. The residential program generally offers you a certain amount of liability coverage, and is only applies to appraisals that you do on residential homes. This type of appraiser error and omissions insurance will cover you if you are an individual or if you are a real estate appraiser that is working for a real estate firm with 1 to 4 appraisers.
This is the general way that insurance companies operate. On the other hand, a standard program will offer you a higher amount of liability coverage, and it will cover you for appraising both commercial and residential properties. Generally speaking, with the residential program and insurance policy, you will need to have at least two years of appraisal experience, and with the standard program policies, you’ll need to have at least three years of appraisal experience. With most policies, having a certain amount of appraisal experience is required. Additionally, there are often extended coverage options for the standard programs available.
Again, there are numerous other advantages to working with the high-quality insurance agency as opposed to working with one who deals with the no-frills policies. You’ll be able to have defense coverage, coverage for attorney’s fees for disciplinary proceedings when necessary, defense coverage for discrimination claims, reimbursement of expenses in some cases, and a lack of membership fees. As you talk to your real estate company and the insurance agencies that you are considering working with, bring up these benefits and see if they are available for you or for your real estate agency.
Considerations to Make When Buying Appraisers Errors and Omissions Insurance
As you look around for an insurance agency to work with and a plan that will fit your needs, you’ll want to take some time to make sure that you are considering all aspects of this form of insurance.
First, think about how much you are willing to spend on a monthly premium. Next, consider how much coverage you want. There are certainly limits associated with this kind of insurance, so make sure to have what you need, but don’t pay for what you don’t need.
Finally, consider customer service. You’ll want to have a good team at your side when it comes to finding the best possible errors and omissions insurance for appraisers. Contact a commercial insurance near you today to learn more about your options, and don’t go another day without this valuable protection!