Posted by RickinVA on 5/18/08 7:41am
Msg #247745

Thanks (kinda long)

A short while ago, I attempted to sign up with a well regarded SS on the upper west coast. I sent an email asking to be put on their list. I got an application back, which I filled out, and sent it off. A couple of days later, I was told they could not use me because I had no E & O insurance. I attempted to explain that E & O only covered actual notarial acts, but they told me that was their policy, and it could not be changed. Oh, well. I told myself that I had gotten along without them for 4 years, and I guess I could continue without them.
A couple of weeks ago, they called for a signing in my area. I chuckled, told them I was available, but couldn't work for them. and told them I had no E & O. The caller said it was OK and what would I charge. I pondered that for a second; should I quote a fee to pay them back for their refusal to give me work, or should I just give them my normal fee? I decided that my fee is my fee and I didn't want to burn any bridges, so I quoted my normal fee based on the time and distance. I got my check a couple of days ago, so, Thanks. I am not identifying them because they might use me again and I don't want to embarrass them. Stupid damn policy, though.

Rick

Reply by WDMD on 5/18/08 8:26am
Msg #247751

I had a somewhat similar situation recently. A local title company called wanting me to send them copies of my commission, E&O, and bonding, which I did. I received an e-mail back asking if I have a fidelity bond. I replied that it is not required of me as I have no employees and that it is up to the title companies to cover any independent contractors they use under their policy. They replied they could not use me then.

I wonder if any independent TPLs still carry a fidelity bond. I know the insurance commissioner made the bonding companies reimburse independent TPLs who had purchased fidelity bonds a few years ago when they clarified the rules.

Reply by Maureen Lazar on 5/18/08 9:14am
Msg #247756

Well... here in California it is MUCH preferred to have 100,000 E&O ins. which runs 156.00 per year. IF I would have never purchased E&O I would not have been able to act as a Notary Signing Agent on many of the transactions that I have in the last 3 years. So in my case the 156.00 to comply with their rules is well worth it.

Reply by Les_CO on 5/18/08 9:32am
Msg #247758

My E&O ($100K / Travelers) cost $42.50 a year here in CO. Different States different costs, I guess. The lenders and title companies, and therefore the SS also are getting more picky about E&O and general liability, I think because of all the investigations into what's happened to the lending market lately.

Reply by Luana Lonergan on 5/18/08 9:56am
Msg #247761

Les, I couldn't have said it better myself.

Reply by Luana Lonergan on 5/18/08 9:57am
Msg #247762

Sorry, wrong post.

Reply by Les_CO on 5/18/08 10:11am
Msg #247764

I have some friends here that have a SS. Last week they had a 1st and 2nd signed by a CO notary, (CO does NOT require either a bond or E&O insurance) here in CO. The request came from a CO Title Co. When the docs were sent back to the lender they wanted a copy of the Notaries “Labiality” insurance. They were sent a copy of the Notaries $100K E&O policy. The lender refused the (properly signed) docs. Said they REQUIRE minimum of $250K. Title said it was the SS fault. The SS had to pay the first notary (she did her job correctly, and is operating within the law) and $300 for a redraw of the docs. The lender then arraigned for someone else to close the loan. Title said to the SS we told you about this lender, they are a PITA. The scheduler did not see the docs, and the lenders name was not on the request, she just scheduled it. The Title Company and its ‘direct’ employees (NOT sub-contractors) are ‘self-insured’ (allowed here). The upshot of all this is I believe that more and more companies are going to require higher limits on some type of liability insurance. And VERY FEW Title Company, or SS insurance policies “extend coverage” to sub-contractors (if one reads the fine print). As a result of this I’ve been looking for more than the $100K I now have, it’s hard to find, and expensive, but both Travelers, and State Farm offer higher liability limits. However one must search out an agent willing to look for this coverage, most don’t know about it, or don’t want to be bothered.

Reply by WDMD on 5/18/08 11:36am
Msg #247768

The upshot of all this is I believe that more and more companies are going to require higher limits on some type of liability insurance. And VERY FEW Title Company, or SS insurance policies “extend coverage” to sub-contractors (if one reads the fine print). "

Notary E&O insurance is really pretty limited when it comes to loan signings. Guess that is one reason for the requirement to have a TPL with the surety bonding. Maryland requires the title companies to cover sub-contractor TPLs with their fidelity bond. The title companies have no choice, it's in the regulations.

Reply by Joan_OH on 5/18/08 4:55pm
Msg #247783

I believe you are talking about Provident. Here in Ohio, they require $500K Professional E&O. Most title companies just subcontract out to another local title company. They used to fill out a form saying they were "covering" the subcontractor under their umbrella, but Provident has since gotten wise. The last 3 I've done, Provident wanted to see my declarations page before they issued the docs.

The first 3 pages of a Provident package go over the E&O rules and say the title company WILL be fined if they do not follow the procedures and be responsible for the redraw. So this falls squarely into into the Title Company's lap. It's difficult to ignore the 3 page instruction and not advise the SS about it. If the SS was not told, I don't see how they could be held financially responsible.

But, I'm sure the SS will pay it to keep their title client - shouldn't have to, but will.

Joan-OH

Reply by RickinVA on 5/18/08 5:07pm
Msg #247784

No, not Provident. I do not wish to identify the company. And this is my last post regarding the identity of the company

Rick

Reply by Joan_OH on 5/18/08 5:39pm
Msg #247786

I was responding to Les/CO post

I believe, but it has not been verified by him, that the file he was talking about was a Provident lender file. I apologize if I was confusing. I'm suffering from a lack of sleep

Joan-OH

Reply by Les_CO on 5/18/08 7:46pm
Msg #247795

Re: I was responding to Les/CO post/ Joan

Yes, it was Provident Funding. And I was mistaken about the "$250K" It was, and is, $500K. Yes, the title company DID tell the SS that this was a requirement of Provident. However as I said there was no mention of the lender on the 'signing request', and the scheduler did not see the doc's. This cost the SS about $500. Larger insurance coverage looks less expensive in that light. The SS now carries $1,000,000.00. Not just E&O but 'expanded' liability coverage. However they (the SS) must now require the notaries they use have E&O insurance, kind of a domino effect. I personally can't imagine a scenario where a notary signing agent could possibility cause more than a couple of thousand dollars in damages to a borrower, or title company, through their actions. Even if they took the signed docs and threw them in the river, 'cause it was a full moon. Anyway.. I think if one wants to continue in this business, liability insurance will be a MUST.

Reply by Ocean Pacific Notary Services, Inc. on 5/18/08 4:18pm
Msg #247781

We maintain a large notary database of preferred notaries and had to flag notaries that did not carry E & O, not because we did not want to use them, but our clients said NO E&O, no orders. We would prefer to stay in business so we had to make the same requirement for those notaries that we worked with.

Our policy changed recently, because we purchased a 1,000,000 E & O policy in Jan 2008 to protect our clients against notarial errors. Prior to that we only had $100,000.00 and it was just on the notaries in our office, not subcontractors. ALL OUR CLIENTS required our subs to have E&O and we found that that the notaries we use have E & O, but only carry very limited amount of coverage, so we thought it was a wise investment and we still do. It has allowed us to work directly with larger title companies and lenders. We have been in business for several years with no issues, but for the same reason why I can carry earthquake and flood insurance on my home when it is not a requirement by my lender - it can be a protection for a future event. And I know not all will agree, I don't expect you to. For us, E & O made sense when I was a traveling notary and makes sense as a business person.

So for the notary who wants to take a chance that the future event will never happen, your choice, but your income, your liablity - and in some states, your commission... it may be all on the line.

Reply by Carmen/123 on 5/18/08 7:52pm
Msg #247797

I have been doing this for a long time now and one thing I have come to realize is that when you are begging them for work they want your soul. But when they need you the rules change. They don't care bout anything except how fast can you get there. .

I guess I am fortunate that the folks (title/escrow only) I work for don't require any proof E and O at all. I really don't see the point because it wouldn't protect them anyway. The bond protects the public from notarial errors and the E and O protects the notary from financial liability.

~Carmen

Reply by Les_CO on 5/18/08 7:56pm
Msg #247798

Re: Thanks (kinda long)/ Well said! n/m

Reply by WDMD on 5/18/08 8:44pm
Msg #247802

"The bond protects the public from notarial errors and the E and O protects the notary from financial liability. "

Not in Maryland. The surety bond protects the public against any kind of claim the public may have against the person whom the bond protects. That could be any claim having to do with anything occuring during closing.

Reply by Ocean Pacific Notary Services, Inc. on 5/18/08 9:56pm
Msg #247806

Keep in mind - the major difference between insurance and bonds are -any monies paid out by the bonding co is due and payable by the one bonded. Insurance does not need to be paid back, although if there is outright fraud/criminal convictions, chances are very good that you are going to be paying back the insurance co for any claims paid out.

Of course, nothing stops the insurance co from dropping you or raising the premium on next renewal - kind of like now after the little "fender-bender" one has - someone ultimately has to pay. THERE ARE NO FREE RIDES.

But is far cheaper for my insurance co to pay a claim, then for it to come directly out of my wallet for a notarial error. They can negoitate better with a team of lawyers from lender/title co. Still it is wisdom to have E&O coverage, than none. And in reality, the costs for premiums are so little as most policies are for your entire commission period (in most cases).

Reply by WDMD on 5/19/08 5:48am
Msg #247814

"Keep in mind - the major difference between insurance and bonds are -any monies paid out by the bonding co is due and payable by the one bonded. Insurance does not need to be paid back, although if there is outright fraud/criminal convictions, chances are very good that you are going to be paying back the insurance co for any claims paid out. "

I am well aware of the differences between a bond and E&O as I have both. I was merely pointing out that my required bond covers much more than notorial errors.