In fact, it doesn’t matter if you’ve been in business for a long time or if you’re new to the real estate industry, the risks you face on a daily basis, from errors in closing costs and payment amounts to not meeting customer expectations. client, make him a prime target of lawsuits. Even if you are cleared of all claims, the fees spent on defense, the time you spend away from your business, and the added stress of dealing with the situation can be costly. Without the proper coverages, real estate agents can put their professional and financial futures at risk.
In addition, it is the role of the title industry to safeguard the client’s escrow and other funds by providing a means for the safe transfer of their real estate in the industry. If an error or breach occurs during this transaction, the agent is responsible for any damages incurred as a result of the error or breach.
Title Agent Errors and Omissions Insurance protects title agencies, including escrow agent, closing cost agent, title finder and more, from the impact of a lawsuit incurred as a result of omissions and title agent errors and fraudulent transfer activities.
This insurance covers all costs incurred as a result of an emerging lawsuit claiming alleged errors in the title documentation process, including title searches and escrow. Under this coverage, the insured is compensated in the event of final settlement up to the limit of the policy, as well as compensation for defense expenses.
Title agent errors and omissions insurance under the Fidelity-Pak program
Title Agent Errors and Omissions Insurance coverage under the Fidelity-Pak program provides a wide range of comprehensive errors and omissions coverage for real estate title agents, including:
Claims related to coverage of defects or deficiencies
Sometimes the real estate process can be damaged due to a defective or non-marketable title, also known as a title defect, which means that there is an omission, error, or other complication related to the ownership of the property that makes it unsuitable for sale to a valid buyer.
Typically, as part of the settlement process under a title contract, the buyer will pay the title company or attorney to search for title to the property and ensure that the seller has valid, marketable title to transfer without title defects to protect the buyer’s right. to the property. However, sometimes important details related to the property are not recorded in state and county records, preventing certain information from being known, putting the agent at risk.
Defect or Deficiency Claims Insurance covers claims related to defect or deficiency claims that result from a non-publicly recorded deficiency or deficiency.
Coverage of Consumer Financial Protection Bureau (CFB) Affairs
The Consumer Financial Protection Bureau protects consumers from abrasive, unfair, or deceptive practices and takes action against businesses that break the law, such as predatory lending.
If a consumer files a complaint against your business with the CFPB, and after an investigation, the CFPB decides that your business has in fact violated federal consumer financial laws, it could result in legal action.
Consumer Financial Protection Bureau Affairs Coverage helps with costs incurred as a result of Consumer Financial Protection Bureau affairs. Under this coverage, Insureds receive sublimit coverage of up to $150,000 for relevant attorneys’ fees, costs, and expenses, including civil investigation, hearing, summons, or civil action conducted or received by the CFPB.
Claims Caused by Independent Contractors
Independent contractor loss insurance covers the Insured against a loss caused by independent contractors.
Occasionally, you may need to hire an independent contractor to help you with your real estate business. During these times, it is important to verify that the contractor is covered by insurance, which will cover damages if the contractor’s mistakes or accidents cause damage.
Coverage of previous acts
Title agents’ errors and omissions insurance covers prior acts. Coverage is a feature of liability policies that extends coverage for insurable events to dates prior to the purchase of the policy. In other words, it covers the time between the provision of the services and the filing of claims as a result of those services. Under this coverage, all claims caused by wrongful acts after the retroactive date and before the end of the policy period are covered.
Fraudulent Email Wire Transfer Coverage (Third Party)
Under Fraudulent Email Wire Transfer Coverage, compensation is paid on behalf of the Insured, those insured sums are legally obligated to pay up to $1 million for a covered loss as a result of an employee transferring escrow funds from an Insured’s account in reliance on fraudulent email instructions released from a criminal claiming to be a legal party to the transaction.