In this volatile real estate market, the risks and exposures title and escrow professionals are facing have multiplied.
Recent foreclosures, increased regulatory scrutiny and the crack-down on Wall Street, have contributed to the increased professional liability exposure of title and escrow agents.
That said, it's important for title agents to avoid the risk of a lawsuit by following best practices and obtaining proper insurance coverage.
The American Land & Title Association (ALTA) has a list of best practices on their website. We've chosen to highlight three of the most relevant ones:
- Establish and maintain written procedures for Escrow Trust Accounts. Following a standard process ensures accuracy and minimizes the risk of losing a client’s escrow funds. These controls also provide more effective staff training and help title companies meet legal requirements for the safeguarding of funds.
- Secure appropriate levels of insurance. Professional liability insurance coverage not only provides peace of mind, but ensures that title agencies and settlement companies have the financial capacity to stand behind their professional services. State regulations or contractual obligations may also require an agency has this essential coverage in place.
- Maintain a written privacy/network security process. Laws often require title companies to have a formal information security program that describes how they protect customer information. The process should be appropriate to the company’s size, the nature and scope of the company’s activities, and the sensitivity of the information it handles.
With regards to professional liability insurance coverage, there are multiple options that can help title agents avoid these potential risks. The two policies most often utilized are Errors & Omissions liability insurance and Commercial Crime insurance (also known as Fidelity insurance), but there are others which will also provide supplemental protection.
In order to determine what coverage options are best for title agency, it's recommended that you speak with a qualified licensed professional. Contact us for more information on a solution that will work for you - call us at 201-847-9175 or email info@axisins.com.
About Axis Insurance Services, LLC is a licensed insurance agency located in Franklin Lakes, NJ with licensed insurance agents nationwide. We offer custom professional liability solutions in the areas of Errors and Omissions insurance (E&O), Directors and Officers liability (D&O), Employment Practices Liability, Privacy/Network Security, Commercial Crime and Fiduciary coverage for today’s professional services companies, including commercial real estate professionals, title agents, abstractors, insurance agents, medical groups, third party administrators, accountants and others.
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Axis Insurance Services, LLC is not affiliated with Axis Insurance Company or its affiliates in any way.
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