Posted by Art_PA on 10/13/13 12:01pm
Msg #487948

Reasons to Have E&O

A recent post mentioned that a notary was "self-insured" In the real world this means that one has more than adequate resources to defend and to pay any claim, with no impact if one loses and has to pay a big judgment and attorney's fees. Bill Gates and Warren Buffett come to mind.

Defending claims and advising clients is not - I repeat - not a hobby. It may shock some of you but attorneys experienced in defending claims get paid, and if you don't have insurance, get paid in advance. A notary gets $xxx for each closing. A defense attorney usually charges, depending upon where you are, $300 - $500 per hour. If you do not have insurance, you can expect to pay a retainer of $5000.

E&O insurance covers not only losses but also attorney's fees, referred to as "cost of defense." these costs can be substantial, and your policy may be unlimited or limited, depending upon what is offered, and what you select.

An E&O carrier may also appoint counsel to assist you before a claim is actually made. For example, you are asked to produce records and to testify at a deposition. Even though you are not being sued, you may be joined after your deposition. Your carrier will want to become involved when you first become aware that there is potential trouble, or when you are called as a witness.

Chances are that you will never be sued, but consider how much you will enjoy writing a check to a lawyer if you "self insure" and you are sued.

Reply by 101livescan on 10/13/13 12:06pm
Msg #487949

I have a friend and colleague who was sued as the notary in an event, and she lost the case. Her E&O paid the $60K judgment costs...perhaps the attorney's fees, I'd have to double check. This is when you definitely want to be covered for $100K.

She was completely innocent, but it was a case where the husband brought in a woman who impersonated his wife, but they had her DL and were able to pull it off. My friend was an outside vendor working for a title/escrow company. If she had been an employee of that company, their blanket E&O would have covered it.

So, I question the wisdom or the merit in being self insured. #$&* HAPPENS.

Reply by desktopfull on 10/13/13 1:33pm
Msg #487952

Completely innocent? Are you saying that the picture on the DL looked like the wife? The signature matched the signature on the wife's DL? Your friend did a poor job in verifying and she got herself in trouble. Yes, it was her fault and she is anything but innocent, her actions caused the wife to be ripped off. I always compare the first doc signed to the signature on the license and if it doesn't match I ask for other ID, if no other ID available, I call the TC or lender. I'd rather be safe than sued.

Reply by Marian_in_CA on 10/13/13 1:23pm
Msg #487951

That's all good and fine...

BUT... what a lot of people still don't realize, for some odd reason, is that Notary E&O Insurance insurance is a very specific type of insurance and is VERY limited in what it covers -- in other words, all of those benefits of insurance are great, but only if the claim relates to errors or omissions for notarial acts. That's it. For notary loan signing agents, that's like have car insurance that only covers your tires. It's a false sense of security.

E&O insurance should only be a part of a larger insurance package...one that includes general business liability insurance.

Reply by MW/VA on 10/13/13 3:30pm
Msg #487959

I agree with Marian & carry both E&O & a Business Liability

Policy. I'm covering my a#s, not meeting the requirements of any particular co. I'm not insuring them, I'm insuring me.

Reply by MW/VA on 10/13/13 3:31pm
Msg #487960

I was also curious about the "self-insured" remark. I've

known large corporations to self-insure, because they have the assets to do it.