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.
Everyone would like to avoid having a lawsuit filed against them, no matter their line of business. Few professions have the benefit of insurance to protect themselves from errors.
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.
It can be very rewarding to be a home appraiser, but without errors and omission insurance, you may be faced with paying so much money out of pocket that you won’t have a sustainable business. It’s true that you have to pay a deductible if you are sued for an appraisal error, but it pales in comparison to the amount due if you paid for it all out of pocket.
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.