Posted by Hugh Nations Signing Agents of Austin on 12/30/08 4:48pm
Msg #273128

E&O insurance

I apologize if this subject has been addressed before. I did a search, but was notably unsuccessful in finding the specific question answered.

I just accepted an assignment from a company for which I do about a dozen closings a year. They have a new mortgage company as a client. The mortgage company apparently wants to require notaries to carry $500,000 in E&O insurance.

Though I am occasionally asked to produce verifications of my E&O, that's rare, and I have never had anyone insist on a policy of that magnitude. I suspect that in some areas, such as Maryland where a title producer's policy is required, that an E&O policy of that size may be standard, but certainly in my experience it is not for the run of the mill signing agent. Do other SA's carry policies that large?

Reply by Barbara___IL on 12/30/08 4:59pm
Msg #273131

I've heard of it, but I don't carry it.

Reply by Leon_CO on 12/30/08 5:20pm
Msg #273132

I did a closing a couple of weeks ago for a lender that required the notary to have $500,000 E&O. The signing service said that I would be covered under their policy, so I was able to do the closing. I only have 100K, and don't plan on increasing it.

Reply by Marian_in_CA on 12/30/08 5:22pm
Msg #273133

If you're going through a signing service, ask them if you are covered under THEIR policy since they are the ones hiring you.

I've never seen an individual notary that carried more than 100K. More than that would probably require a custom liability policy of some sort.

Reply by Becca_FL on 12/30/08 5:29pm
Msg #273135

Provident requires NSAs to carry $500,000

The requirement is not necessary if the closing is scheduled by a SS w/ $1 mill in liability, from what I understand. One of the FL NSA members carries the $500k because she gets enough Provident deals to cover the $700 per year the policy costs her.

Reply by Teresa/FL on 12/30/08 6:31pm
Msg #273142

Re: Provident requires NSAs to carry $500,000

I have 500K coverage and I have more than enough business from Provident through TCs to justify the cost.

A SS should have at least this amount of coverage, so if a SS is asking you about this their coverage is not adequate for this business.

You can get this type of insurance through any agency that writes Professional Liability policies. None of the notary organizations write coverage for more than 100K.

Reply by Becca_FL on 12/30/08 7:41pm
Msg #273148

There she is...I was hoping you would chime in. :) n/m

Reply by Kevin/Ct on 12/31/08 4:21am
Msg #273179

We carry $1,000,000.00 of liability insurance coverage.

Reply by Ilene C. Seidel on 12/31/08 7:14am
Msg #273181

Maryland doesn't require any E&O insurance it's up to the closing agent. We do carry a surety bond of $100,000. Personally I carry $50,000 of E&O

Reply by BobbiCT on 12/31/08 7:30am
Msg #273183

E&O insurance opinion

If you are an attorney or a signing agent in states that allow more than "point & sign" (CT being a p&s state), I can see higher E&O for signing agents. Notaries, on the other hand, are PUBLIC officials, and it seems discriminatory to tell a consumer that they must use a notary PUBLIC that cares more insurance than state law mandates to "notarize their company's document." (Would make for an interesting discussion with State commission officials.)

I wonder, Why? Are the title and scheduling companies pushing higher E&O coverage on its subcontractors to lower their costs and risks? I understand a bond requirement, which protects the consumer; but why E&O which protects the vendor. From an expediting a return on their investment perspective, requring subcontractors to carry higher E&O makes sense. Insurance companies find it more cost effective to settle than "fight"; i.e., in the event of a claim the claim is paid quickly rather than contest it (which takes years and generally costs more to the insurance company than paying the claim). The title or scheduling company's E&O carrier can immediately "blame" the signing agent subcontractor for shoddy workmanship, who now carries a higher policy that covers 100% of the claim.

Being in CT, I don't carry that much coverage and won't. I cannot practice law and, in my low housing value area, my percentage of "risk" as a non-attorney notary public would rarely, if ever, be that high. I don't want a big red "sue me because I have so much insurance coverage" target on my back.

Reply by Lee/AR on 12/31/08 9:28am
Msg #273192

Totally agree.

Adding that it is the E&O carrier's decision as to whether to pay or fight and all they care about is their bottom line. My thinking is that it's just a way to 'spread it around'.

Reply by Dave Heine on 1/1/09 9:59am
Msg #273257

Hugh:

I think you are confusing Notary E&O Insurance with professional E&O or as our attorney says our malpractice insurance.

100k is the highest E&O for notaries, but as a title company, I carry 1 million in E&O on my business. I think the lender is referring more to the underlying E&O for the company that is hiring you. I believe you are covered by the signing company or title company for errors and omissions NOT related to your notary actions.

I can tell you as a company, my E&O insurance last year was close to 12k. I dont think your going to carry that as a notary

Dave

Reply by Linda_H/FL on 1/1/09 10:04am
Msg #273258

No David - Hugh's not confusing anything

Provident has had this requirement for a very long time - their NSA's must have $500K in E&O...many times the hiring title company can extend their coverage to the signing agent but many times not....as was posted, some get enough Provident business to justify purchasing a professional liability policy in that amount so they can close Provident loans.

Reply by JanetK_CA on 1/4/09 2:48am
Msg #273469

Hugh's not confusing anything - and for the record...

Hugh is an attorney himself. I'm betting he knows the difference.