Agents for major insurance provider Lloyd’s have begun giving notice to many appraisers informing them that their E&O policies will not be renewed after mid-November 2010. According to the notices of non-renewal, the underwriting group at Lloyd’s who covered them has decided to stop insuring real estate appraisers. This turn of events is not unexpected. Some carriers have sustained very heavy financial losses in connection with appraiser E&O claims. This is likely the case with the underwriting group at Lloyd’s. The claims environment for appraisers does not appear to be improving. In addition, a few carriers in the past have taken the approach of jumping in and out of the insurance market for appraisers depending on year-to-year results. Unfortunately, this approach sometimes leaves the insured appraisers stranded and needing to shop for a new carrier.
The key issue for appraisers left stranded by Lloyd’s will be to assure that claims which might arise regarding appraisals performed while they had coverage with Lloyd’s will be covered by their new insurance carrier. To accomplish this, appraisers need to make sure that their “retroactive date” or “prior acts date” (equivalent terms) goes back to the same date as in their non-renewed policy. In the present claims environment, there are also some very important considerations that appraisers should give to relevant policy provisions and exclusions. These points are covered in an advisory for READI members in the resources section of readimember.org.
If you have questions about obtaining new coverage or wish to apply for coverage, appraisers may contact this blog’s sponsor LIA Administrators & Insurance Services. liability.com. LIA has provided insurance to appraisers since 1977. Its E&O program for appraisers is underwritten by carriers in the Liberty Mutual Group.