Archive for Real Estate
This coverage insures against claims that arise from alleged negligent acts, errors, or omissions in researching the validity of real estate property titles and any restrictions on them. Coverage applies to claims that arise due to an abstractor providing either faulty or incomplete information about the title. It is usually written subject to a minimum deductible per claim and is often combined with Title Agents Errors and Omissions coverage.
Apartment complexes provide housing to individuals who pay rent to the building owners. Amenities vary and can include community centers, golf courses, exercise facilities, and other activities. The types of structures vary, ranging from multi-unit single story frame dwellings to high-rise, sprinklered, fire resistive buildings.
Appraisers provide objective and unbiased estimates of the value of certain property. Many specialize in specific types of property, such as real property, jewelry, antiques, or fine arts. This coverage protects individual appraisers or appraisal firms against claims that allege negligence or bias in preparing appraisals.
Community Resort Associations
Community resort associations are nonprofit homeowners associations located in resort states such as Florida, California, and Arizona. Condominiums, development homes, or planned unit developments (PUDs) are usually situated near golf courses, beaches, and lakefronts, tennis courts, swimming pools, and other recreational facilities. Every property owner is required to join the association. The association makes decisions concerning maintenance and upkeep of common property. Common property may include a country club, golf course, courtyards, gardens, and walkways. Homeowners pay fees to the association. The association boards are made up of property owners and are led by an elected or appointed president. Associations usually hire managers to oversee the property. General liability, excess/umbrella liability, directors and officers liability, and employment practices liability are the coverages usually provided.
A condominium association is a legal entity made up of individual unit-owners who own their individual living spaces but who jointly share ownership and responsibility for maintenance and upkeep of common areas. Condominiums can present unusual and sometimes complex insurance problems with respect to property, liability, crime, and workers compensation coverages for the condominium buildings and operations.
Escrow Agents E&O
This coverage pays for damages that arise from escrow agents’ negligent acts, errors, or omissions. In addition, mortgage service companies, mortgage departments of banks, savings and loan associations, and title companies often act in this capacity to arrange and service loans for real estate properties. Deeds, property taxes, and property insurance premiums are examples of items that title companies and mortgage service companies or departments hold in escrow. The market for this coverage is limited
Home Sellers Liability
This coverage reimburses home sellers for monetary losses and legal expenses from claims of defects in the home or property by home purchasers. It is usually purchased by real estate firms to cover sales of listed homes and is automatically provided to all listed home sellers. It pays up to stated amounts to reimburse monetary loss and legal expenses. It also provides real estate firms with an advantage in obtaining listings.
Homeowners Associations (HOA)
Homeowners associations are nonprofit organizations made up of property owners who work together to govern and maintain jointly owned property. Community swimming pools, tennis courts, golf courses, and clubhouses are maintained for the use of members and their guests. Property owners pay fees for services the association renders to maintain these and other facilities, in addition to maintaining all common property. Property owners make up the boards that elect the officers. A manager is usually hired to make day-to-day decisions and hire workers who maintain the property. The board may purchase directors and officers liability coverage to protect it against wrongful acts to third parties and employees. In many cases, employment-related practices liability coverage is purchased to insure against wrongful termination, harassment, or discrimination of employees or third parties. Standard carriers write many smaller associations. However, excess and surplus carriers write the larger ones that have more extensive property and liability exposures.
Mortgage Bankers and Servicing Agents E&O
This coverage protects against losses from any claim against the insured for alleged negligent acts, errors, or omissions committed in originating, financing, closing, selling, or servicing mortgage loans on real estate or providing advice for any of these.
Mortgage Brokers E&O
Mortgage brokers place mortgages for realtors who sell homes and commercial risks. The brokers arrange the financial papers and place the loan with secondary money markets or financial institutions. Unlike mortgage bankers, they do not handle the loan once it is placed. Mortgage brokers are the intermediaries between purchasers of the property and the lenders. Errors and omissions coverage protects the broker against loss from any claim for any alleged negligent act, error or omission in placing a mortgage.
Mortgage Impairment Insurance
This coverage protects banks and other financial institutions for their mortgagee interests on property owned by mortgagors that have secured loans from them. Because the mortgagor is required to carry first-party coverage on the mortgaged property, this insurance is secondary and protects the interest of only the mortgagee. It may also cover a broader range of perils including flood, wave wash, collapse or subsidence, and earthquake. A variety of options are available and limits available can be substantial. It is usually written subject to a deductible.
Auction houses are considered nonstandard fire risks due to factors such as poor water supply, distance from a public or volunteer fire department, poor housekeeping, and often below-average building construction. Establishing appropriate insurance to value on consigned personal property for which an auction house may be legally liable is often difficult and limits the number of markets available to provide appropriate personal property coverage.
Property Management E&O
Property managers arrange for property maintenance, leasing or renting, construction, alteration, and land development. Any real estate firm must carefully supervise these and related activities in order to avoid errors and omissions claims. While many property managers are also real estate agents, not all are, and this coverage does not extend to any real estate agents E&O.
Real Estate Agents E&O
This coverage protects a real estate agency against claims for damages for financial loss due to the agencyâ€™s alleged negligence. The allegations of negligence must be related to the conduct of negotiations and business performance for others.
Real Estate Developers
Title Insurance Agents E&O
This insurance covers title insurance agents for claims for damages alleged to have resulted from negligent acts, errors, or omissions on their part as title insurance agents in performing professional services for others. It usually excludes claims that arise from opinions of title or real estate rendered by the insured and claims that arise from defects in title either not disclosed on public records or that the insured knew about when title insurance was issued.
Vacant Commercial Buildings
Vacation Income Property
Unoccupied vacation property that is a financial drain to the owner can be turned into an income producer. When it is unoccupied the expenses for a caretaker to watch over it rise as does the cost to insure a vacant dwelling. However, a property management firm can be hired to oversee and rent out the property. The rental fee should pay for the property management fees, all ongoing costs required to keep the property maintained and generate a profit for the owner.