E&O for Brokers

professional liability insurance : E&O for Brokers,Why It's Necessary?

Any business or professional can be susceptible to a client’s claim of negligence or mishandling of information, and when working in professions that deal extensively with processing applications, filing deadlines, and accuracy of detail. In the world of real estate, buying or selling is an exciting time, but yet it comes down to having an agent that understands how things work. Once they help find you that perfect home, you need to make sure you have the financial backing to make the purchase.

Why It’s Necessary

Bankers and brokers need to recognize the potential for a lawsuit should any problems arise during the loan origination and the closing. A type of professional liability insurance, mortgage errors and omissions insurance offers financial coverage for those who provide commercial loans, residential loans, reverse mortgages, or hard money mortgage loans. When in the process of formulating one of these loans, the broker is expected to act in good faith during the transaction, which is in accordance with standards of professionalism identified for the industry. However, a broker can be sued is something goes amiss and could be held liable for thousands of dollars in defense costs.

Through an E&O policy, the team at https://www.axisins.com indicates a broker can find coverage during any of the following steps or tasks involved in a mortgage process:

  • Loan application
  • Loan processing
  • Loan underwriting
  • Loan approval and closing
  • Good faith estimates
  • Presenting disclosures
  • Documenting the loan
  • Locking interest rates