We all make an occasional mistake, don’t we? Well if the person making the mistake is the real estate appraiser, it can cost the appraiser and buyers a lot of money to fix. Unluckily for the appraiser, the fault will lie with him if the homeowner can prove that the error was his fault.
It is all but necessary to protect yourself from this kind of liability, which is why appraisers must have errors and omission insurance. It’s not impossible for financial disaster to be the result of a mistake that could have been overlooked if it were for insurance.
While we all will make the occasional mistake, home appraisers should be especially aware of how much their mistakes can potentially cost themselves and others. This is why an appraiser cannot afford not to have errors and omissions insurance for their business. A good insurance policy will include unlimited appraisals, and commercial and residential properties. It is critical to understand what your E&O insurance will and will not cover.
It is no fun to have a lawsuit filed against you, and everyone would like to avoid it if possible. Not everyone can avoid it when it comes around.
Appraisers are very fortunate though, that they have the option of protective errors and omissions insurance. A lot of mortgage companies make it mandatory that any independent appraisers they use have insurance to protect themselves from mistakes of appraisers.
Although the appraisal business can be very lucrative, you may find it costly to yourself and difficult to find work without errors and omission insurance. And while you will need to pay a deductible if someone sues you for an appraisal error, the amount will be much less than if you had to pay for the whole thing yourself.
It is critical to protect your appraisal business by buying the best kind of insurance to guard against your mistakes or what others accuse you of being your mistakes. Your business will benefit greatly.