Posted by grapebed on 1/31/13 8:38am
Msg #453222

E & O question...RE: $500,000 or $250,000 or $100,000

My $500,000 E & O Policy is about to expire. Last year I had a client that specifically required $500,000. They are no longer a client.

I am sure this has been discussed ad nauseum, but I really don't know how much to renew for. Yes, there is some sort of "trophy value" in having $500,000 in E & O. But do I really need that much?

I know if I survey my clients, most will say that they would prefer I keep my E & O at $500,000. It doesn't cost them anything. Any thoughts would be appreciated. Thank you

Reply by Lee/AR on 1/31/13 9:10am
Msg #453225

Lots of opinions on this and mine is: the more you have, the bigger and better a target you make.

Reply by Linda_H/FL on 1/31/13 9:45am
Msg #453234

IMO only you can decide that as only you know your

particular circumstances.

Keeping in mind - E&O only covers notarial errors - imagine the damage your notarial error would have to cause to incur $500,000 in damages solely attributable to YOU. I agree that you just just paint a target on yourself. IMO those who require that much coverage really have no idea exactly how limited it is.

JMHO

Reply by Julie/MI on 1/31/13 9:50am
Msg #453236

$10,000

That's all I've ever carried and it comes free with my bond and runs the 6 years of my commission.

And I'm a full time, high volume closer, not just a few here and there.

Reply by Linda_H/FL on 1/31/13 9:58am
Msg #453237

You're lucky Julie..I've been told by more companies than

I can count that I need far more than $10,000 - some want $25,000, some $50,000, several require $100,000 - and if I don't get that amount I don't get added to their database.

Reply by Julie/MI on 1/31/13 10:33am
Msg #453245

Re: You're lucky Julie..I've been told by more companies than

Yes I know what you're talking about Linda--A few years back it seemed that there was a bandwagon a fart that everybody needed $100,000 per the lenders requirement. I did purchase a one-year hundred thousand dollar policy and I've never been asked for it again and that was three years ago. Hopefully by posting here I didn't open up a can of worms

Reply by Marian_in_CA on 1/31/13 12:11pm
Msg #453265

Re: You're lucky Julie..I've been told by more companies than

The really DUMB part about requiring such high levels of Notary E&O Insurance insurance is that it's pretty much useless for loan signing work. Notary E&O Insurance will only cover a very limited amount of the work when it comes to notarizations. E&O policies have so many exclusions that the policies are almost useless... in so much that they ONLY cover notarial acts.

A lot of people only recommend that you get E&O coverage to match the amount of your state required bond, if any... but I'm not sure that's wise... I think you'd need more than that. E&O is meant to help pay back the bond and well as associated legal fees and such. So, it's probably wise to have at least 3 times the face of the bond, if not more.

But then... really... you should also have general business liability coverage, too. The job specific policies are fine, but you also need some general coverage.

AND.... AND.... AND....

It's REALLY, REALLY important that your auto insurance company be made aware that you're using your car for business purposes. I talked to a lady the other day who said she learned this the hard way. She was in an accident, deemed partially her fault. She was on the way to FedEx from a loan signing appointment to drop off documents and was facing a deadline. While the police and tow truck were there, she excused herself and called her daughter to take the package to FedEx for her. The police asked her what she pulled from the car, where she was going, etc... pretty normal questions investigating the accident. She explained that she needed to drop of documents to FedEx and had to call somebody to take them to meet the deadline. The officer approved taking the item from the car and noted it in the report.

Well, her insurance company saw the report and asked her about it... again, as she said, it seemed all normal investigating the accident and the claim. So she went on to explain her job as a notary. A week later she got a letter saying that they were not going to pay because she's been using her vehicle for business purposes, but she told them it was a personal vehicle for commuting...and as such business related use of vehicles on their policy was excluded. Sure enough, they found it written right in the policy... and they never even thought that it mattered to tell them she was using her car for her business.

Now, they are going to have to foot the bill on their own because of that mistake. They had insurance, sure.... but it was not the right kind. A lot of notaries are out there working with the wrong kind of insurance, too. E&O is great... but if you don't know why you have as much as you do or what, exactly, it covers, you might find yourself in some trouble.

Reply by Barb25 on 2/2/13 2:55pm
Msg #453656

Re: You're lucky Julie..I've been told by more companies than

There is something very strange about that insurance story. And, well, I live in FL and have live in NY and NJ, never in CA but I certainly would get a lawyer if that is true. She was driving to a fedex dropoff at the time of the accident.

Reply by jba/fl on 2/3/13 12:27am
Msg #453731

Re: You're lucky Julie..I've been told by more companies than

and if you do not have business insurance for your car and they find out you were doing business with your car at the time of the accident (going to and from FedEx, etc is part of the process of business) you are SOL in FL. For about $60 yr. is what I pay, I will gladly pay that extra. The alternative is not worth it, esp. with a hybrid car and my battery were to suffer.....major expense.