Posted by Kendall Leigh on 8/7/13 8:27pm
Msg #479592

E & O and General Liability Coverage

I was just told by an escrow company that in order to work with them any longer I need $500,000 E & O insurance and $500,000 General Liability. I have $100,000 and have never heard of this nor can I find anyone who offers $500,000 to notaries. Help!!

Reply by MW/VA on 8/7/13 8:32pm
Msg #479593

Provident was requiring $500K E&O for notaries & some have found a way to do that. I wouldn't.
It's an excessive amt., IMO. What mistake would a notary make that could warrant that kind of $$$$. IMO they get confused with the kind of E&O that tc's & settlement agents carry. They have much more liability than we do.
If it were me, I'd pass on a co. expecting that. Even $100K is more than enough, IMO. It's there to cover you against lawsuits primarily. It was NNA that marketed the $100 requirement, and there are a lot of notaries who carry far less than that.

Reply by Kendall Leigh on 8/7/13 11:44pm
Msg #479615

Ok I agree 100% however, when hired by the escrow companies direct you are being paid $150 and up, does it make it worth it? Not sure. I know Provident wants $500,000, but when you are hired by a signing company, they cover you for that. I have never heard of a notary carrying General Liability Insurance, nor has the NNA. This is a good client of mine, but it's just not making sense, especially when the NNA etc do not carry insurance in that amount. I have been a notary for 32 years, it just doesn't make sense.

Reply by Marazz/AZ on 8/8/13 9:04am
Msg #479637

There is a trend in real estate to go after insurance policies for losses. Many people don't understand E&O, it covers the cost of a mistake you might make. It doesn't cover fraud or mistakes someone else in the food chain makes. But that doesn't stop companies from requiring it for (IMHO) misguided reasons. Unfortunately a lot of E&O companies will pay out $10K or $20K to settle a case even if there was no wrongdoing because it's cheaper than litigation. Banks, title companies, and even the FDIC are well aware of this and exploiting it. Other companies see their competition requiring these amounts and they jump on the bandwagon even though they don't understand it.

Although, some companies may be using it as a "setting the bar higher" in hopes of getting more professional notaries. So I guess it's up to you, to decide if that client is worth it, and what the extra marketing bang for your buck is.

And be sure what you are getting, most E&O are "claims made" policies that cover you on the day the claim is made. You aren't covered years later unless the policy is still active and you have prior acts coverage. I don't think most companies requiring these policies even understand how they work which is why I think the whole idea of $500K coverage for notaries is kinda silly.

Insurance should be FOR YOU not for someone else. If you want to make sure YOU are protected, E&O is one way, you should probably also look into general liability business insurance. Taking advice from people on the internet (me included!) is no substitute for talking with an insurance professional.

Reply by MW/VA on 8/8/13 9:23am
Msg #479639

I do carry a business liability policy in addition to SA E&O n/m

Reply by sueharke on 8/8/13 12:27pm
Msg #479687

Writing as both a CPA and notary. I am looking at getting General Liability Insurance mainly for my CPA work (as it will cover notary too). The liability issues for doing income tax returns is more than notary. The estimated cost is around $500 after talking to the insurance agent.