Posted by Jessica Ward on 2/27/10 8:00pm
Msg #324573

E&O Insurance

Question... I've never had a claim on my E&O policy, but when I think about the "worst case scenario" about if I were to mess up and need it... it seems like $100k might not be enough.

I close many jumbo mortgages every month (one home that I visited today had private yacht moorage...which is what got me thinking about the subject). If I messed up and had to make up a rate movement due to a missed lock, that claim would go on my insurance, right?

On a loan that size, insurance might not be enough and it might clean me out, but I've never seen a policy larger than $100k issued.

Am I missing something? Could someone who knows more about E&O insurance than I chime in and ease my nerves or fill me in?

Thanks much in advance,

Jessica

Reply by Shoshana/AZ on 2/27/10 8:03pm
Msg #324574

Truthfully, you should carry as little as possible. If you read your policy carefully you will see that it only covers unintentional notarial errors. It will not cover any judgements, fines or civil damages againts you.

Reply by Jessica Ward on 2/27/10 8:20pm
Msg #324575

Thanks! That helps a lot. Naturally, unintentional errors would be the only kind that would happen. Do you carry additional insurance in case of civil damages? It just seems like the world is so sue-happy, I want to make sure I'm covered--I don't actually anticipate anything that could result in a claim. I'm one of those hyper-cautious people though who gets too much insurance on everything just to be safe.
Thanks again!

Reply by Shoshana/AZ on 2/27/10 8:47pm
Msg #324578

No, I do not carry any additional insurance. Perhaps somebody else here can speak about forming an LLC. That might give you some additional protection.

Reply by PAW on 2/28/10 7:10am
Msg #324608

Forming an LLC may not offer any protection

Since the title company, either directly or indirectly, is hiring YOU, the person, the individual and not your business, YOU may be personally liable regardless of your affiliation with any business organization, LLC, S Corp, Inc., etc. And, as Shoshana has previously stated, Notary E&O Insurance wouldn't offer much, if any, protection for signing agent blunders.

Reply by BrendaTx on 2/28/10 7:38am
Msg #324611

Right, Paul & Shoshana...but...

*as Shoshana has previously stated, Notary E&O Insurance wouldn't offer much, if any, protection for signing agent blunders.*

The "but" is that has any one "association" made out like a bandit on selling hundreds of thousands of policies by promoting that notaries carry larger and larger policies? I think maybe so...yet another scam perpetrated on the notaries/members.

Back in "the day" notary E/O policies were tiny. Now, they are huge. And, they are relatively cheap based on the amounts they will pay out...so, my thought is that the risk is very, very low. Yet we have to carry them because the XYZ convinced somebody, who convinced somebody...and it snowballed. I've ALWAYS carried between $35K-$50K as a signing agent because the lemming-like !#$!^^s who were hiring us thought they needed us to have it.

The E/O only covers your notary cert. How many transactions don't happen because of a notary cert accidentally being filled out wrong?

Reply by Shoshana/AZ on 2/28/10 8:57am
Msg #324626

Is this true even if you have an EIN?

I would think that if the check is cut with the name of the notary's company, then that is with whom they are doing business.

Reply by kathy/ca on 2/27/10 9:41pm
Msg #324585

Jessica: I feel like you do about wanting to be covered to

the max BUT on the other hand, E & O insurance sure doesnt offer us much protection, like Shoshana said, just against unintentional notary error and I think for most of us, that is not our biggest concern.

Most of us have been in the business long enough to feel pretty secure about our notary certificates, its the loan signing business that makes us fearful should something go amiss. I do not however necessarily agree that we should have a lesser amount of E & O because should we make an error, we are going to want as much coverage as possible even though coverage is for our notary certs only.

Reply by Shoshana/AZ on 2/27/10 10:33pm
Msg #324596

It's not just loan signings....

***There is also huge liability in general notary work. What if you did a signing for a POA and the person appeared competent, but really was only having a "good day"? If you didn't ask the right questions, you might find yourself in hot water.

When I was a CA notary, I once got called by the Alameda County DAs office regarding a loan signing I did. The siblings were complaining that this one daughter was planning to to take the mother's equity for her own use.
I told the Assistant DA what I knew and how I conducted myself. She told me that it appeared that I did everything correctly.

I probably will open up a whole can of worms with my next comment. A CA notary who I have tremendous respect for, once made a point on a notary board about how many notaries might have completed a loan signing or a POA signing even though they had an idea that maybe at least one of the signers really wasn't competent to sign but did so because they were sick, elderly people who needed the money for medical bills, etc? That could also open up one for a law suit, even if the notary had the purest of intentions.

***I am not an attorney admitted to the Bar in AZ or any other state.

Reply by kathy/ca on 2/27/10 9:44pm
Msg #324586

Shoshana, no disrespect but "carry as little as possible"

E & O, really????? I am curious about what your thoughts are in regard to this statement. Please explain, thx!

Reply by Shoshana/AZ on 2/27/10 10:09pm
Msg #324592

Re: Shoshana, no disrespect but "carry as little as possible"

If you read your policy and see how little it covers, you will understand. This is my opinion.
It's a free country. So, everyone can buy as much or as little E&O as they want as long as they comply with the laws of their state.

Reply by Marian_in_CA on 2/27/10 10:18pm
Msg #324593

Personally? I think you should carry enough E&O to cover your bond (if you have one) and attorney's fees related to dealing with a claim on your bond. Beyond that, you should be carrying business liability insurance and possibly an umbrella policy.

I know a lot of insurance agents will get E&O coverage specific to notaries included in a business policy. The E&O portion is a specific type of liability coverage for unintentional errors. That fact is, unintentional mistakes for notaries seem kind of rare.... well, that's just me. I feel there's a difference between unintentional and the result of ignorance.

An unintentional error, to me anyway, would be something like being fooled by a really good fake ID, not (at least in CA) forgetting to get a fingerprint on a deed signing. The notary should know that's required by law, and anything that could get you fined by the SOS should be excluded as unintentional.

That's where general business insurance and umbrella policies come in.

If you don't have business insurance on top of E&O... you really should get it. It's not that expensive, and it could save your rear.

Reply by Robert/FL on 2/28/10 7:22am
Msg #324610

Non-signing agent notaries should also carry E&O but only a small policy is needed. Personally, I only carry $1,000, because it was given to me free with my bond. Next time I renew I will probably go for at least $5,000, for peace of mind only. The type of documents I typically notarize are not involving financial transactions where I could be held liable for a loss. Of course, I have notarized my fair share of mortgages, deeds, etc., but the majority of my notarizations are affidavits, verified court pleadings, wills and DPOAs.

Reply by MW/VA on 2/28/10 8:09am
Msg #324613

E&O Insurance is not enough to cover you in this business. I have a business liability policy that costs me $225/yr for $500,000. I also carry $100,000 E&O.

Reply by kathy/ca on 2/28/10 10:58am
Msg #324644

a few months ago someone posted they were being sued,

was there ever a follow up to that post? Just wondering how that turned out.

Reply by MW/VA on 2/28/10 1:05pm
Msg #324653

Re: a few months ago someone posted they were being sued,

That is "Notarysigner" & I think the court date is coming up.

Reply by kathy/ca on 2/28/10 3:48pm
Msg #324668

Nope not that one, this one was back in November I think &

it wasnt "Notarysigner", I think it was "snreis" or something like that!

Reply by Shoshana/AZ on 2/28/10 4:13pm
Msg #324675

NREIS is a company, not a person. n/m

Reply by JanetK_CA on 2/28/10 5:29pm
Msg #324687

Could it have been sreis, attny in NE? (in MA??) n/m

Reply by kathy/ca on 2/28/10 6:10pm
Msg #324699

Thats it Janet, sreis, and he/she was an atty being sued.

I hadnt heard what the outcome was and was just being curious.

Reply by jba/fl on 2/28/10 6:53pm
Msg #324704

She referenced the right person Shoshana... n/m

Reply by Shoshana/AZ on 2/28/10 10:20pm
Msg #324722

Nope. She said snreis. n/m

Reply by kathy/ca on 2/28/10 10:45pm
Msg #324724

jba is right, it is sreis, hit the "n" by mistake. NREIS is

of course a company!