Monday, June 2, 2008

What's Covered Under Errors & Omission Insurance?

Although most companies require signing agents to carry errors & omission coverage, many are still unclear about what E & O insurance covers. Notary E & O insurance covers losses from notarial acts related to errors, omission, or negligence during the notarizing of documents which can include improperly identifying a borrower or an improper or missing stamp or seal. E & O does not cover errors related to non-notarized functions and documents that are a large part of what takes place at a signing. And notary bonds do not protect the notary, they protect the public. Some companies seem to be trying to fill that gap by recently offering signing agent E & O insurance. The USNA and both offer signing agent errors and omission insurance (this is not an endorsement).


Anonymous said...

Let me ask you a question - do you think having a SA E&O policy lowers the risk to us, or adds a bulls-eye on our back?

I'm unclear, and would love some clarity - because what it looks like to my eye is that it's an additional pocket to tempt hands to go for. It would seem to me (and I'm not very knowledgeable about the intricacies of insurance) that a General Liability policy would be a better protective device than this, if you were looking to decrease your risk?

What says you?

Alex Y. said...

It's a valid concern IMO. In my past insurance life, one of my many hats included handling bodily injury claims for auto accidents. I consistently found that those with $500,000 or $1,000,000 bodily injury coverage were much bigger targets for lawyers and lawsuits and ultimately at much greater personal risk than those with minimum $20,000, regardless of the severity of an injury. This was because of the exact reason you just mentioned, tempted hands that saw deep pockets.

I just don't know much right now about these new signing agent E & O policies, but from discussions with others, there's a lot of skepticism. Personally, I do carry a liability policy through my insurance company.

Anonymous said...

Well, this is really going out on a limb - and I'm VERY careful about that - but assuming a person is between the rails of legality, which any ins policy is going to assume anyway, I'm just not seeing a risk to validate so much ins.

If the Note is signed and valid, the LOAN is valid and almost everything else is fixable. It's pretty hard to mess up a Note (hmmm ... well, for most of us!).

I probably shouldn't have put this in writing ...

Anonymous said...

Good post.