Vendor agreements with "hold harmless"

[DWiley]

I am confused on why you seem to oppose any discussion that appraisers at this forum about reducing their own risk. Think about it, you dont seem to disagree with hold harmless agreements until its the individual apprasisers wanting a little Hold Harmless for themselves.

I am not opposed to such discussion at all. If I were I certainly would not be participating in this thread . One of the main reasons I am such a advocate for use of real digital signatures is to reduce risk to appraisers.

I carry both an E&O policy and a general liability policy, and I am very concerned about increasing exposure to me and my company. From the flavor of the prior posts, it seemed to me that many are under the impression that AP is introducing something new to the equation. I was trying to point out that such clauses are not uncommon, and to alert appraisers they they may already have unknowingly agreed to such terms with other companies. It is not just the "black hats" that have such language.

Some also seem to be under the impression that E&O insurance covers the client, and that somehow the AP agreement changes that. I have never seen an E&O policy that covers the client or any party other than the appraiser.

 

[DWiley]

If we are not going to be covered, why even bother paying for E&O?

The letter I read says:

Please understand that signing such an agreement will not, in and of itself, jeopardize coverage under a Liberty policy
​

How does that translate into not being covered?

 

[Workbox]

There is more to it that you missed.

Indemnity and Contractual Liability (proprietary rights, confidentiality, equitable relief) (Section 8 and 10) – We understand that many appraisers are asked to enter into contracts that contain an indemnity or hold harmless provision. Unfortunately, the provisions of the policy issued to you by Liberty would not provide coverage to AppraisalPort (FNC, Inc.), or any of your clients pursuant to an indemnity or hold harmless agreement that you may have signed. Further, the policy would not provide any additional coverage to you for any added expense or obligation which you incur as a result of such an agreement.

The reasons for this position are found in the policy. First of all, Liberty’s insurance is afforded to only the company or those individuals that fall within the definition of "Insured" found in the policy. The definition of "Insured" does not include any of your clients. In addition, the EXCLUSIONS portion of the policy clearly indicates that the insurance afforded thereunder does not apply:

"...to any claim based upon or arising from the liability of others assumed by the Insured under any contract or agreement, unless such liability would have attached to the Insured even in the absence of such contract or agreement;..."

Please understand that signing such an agreement will not, in and of itself, jeopardize coverage under a Liberty policy. However the additional, potential risk and cost that may result to you would remain your sole responsibility and cannot be passed on to the carrier.

 

[DWiley]

There is more to it that you missed.

No, I did not miss that.

Unfortunately, the provisions of the policy issued to you by Liberty would not provide coverage to AppraisalPort (FNC, Inc.), or any of your clients pursuant to an indemnity or hold harmless agreement that you may have signed.
​

My E&O policy does not cover AP or any of my clients anyway. It covers The Wiley Group.

Clients are not "losing" my E&O coverage because of this agreement; my E&O has never covered them.

 

[Roscoeman]

The letter I read says:

Please understand that signing such an agreement will not, in and of itself, jeopardize coverage under a Liberty policy
​

How does that translate into not being covered?

How about posting the second sentence of that paragraph?

However the additional, potential risk and cost that would result to you would remain your sole responsibility and cannot be passed onto the carrier.

........

 

[Workbox]

No, I did not miss that.

Unfortunately, the provisions of the policy issued to you by Liberty would not provide coverage to AppraisalPort (FNC, Inc.), or any of your clients pursuant to an indemnity or hold harmless agreement that you may have signed.
​

My E&O policy does not cover AP or any of my clients anyway. It covers The Wiley Group.

Clients are not "losing" my E&O coverage because of this agreement; my E&O has never covered them.

I think the American Appraiser can read it correctly.

Unfortunately, the provisions of the policy issued to you by Liberty would not provide coverage to AppraisalPort (FNC, Inc.), or any of your clients pursuant to an indemnity or hold harmless agreement that you may have signed. Further, the policy would not provide any additional coverage to you for any added expense or obligation which you incur as a result of such an agreement.

 

[DWiley]

Workbox,

There is a difference between E&O insurance and general liability insurance. I can see how agreeing to the terms of use might affect my general liability policy, but as stated in the letter, it does not affect my E&O coverage.

E&O insurance covers just what it says - professional errors and omissions by the appraiser. E&O does not cover the client, and it does not cover the appraiser for things like sending a report via FedEx or web portal. Even without that hold harmless language, my E&O would not cover my use of AppraisalPort, because my use of AP has nothing to do with any errors or omissions on my part. At least that's how my E&O company explained it to me.

DW

 

[Workbox]

Eithway, we are still in jeopardy, because they are trying to lay the burden on the appraiser about the conversions and ability to tamper with the reports. Not just for FNC, but all those other portals and software companies that might have it coming to them from the Stockholders, Congress, and American Public. That is my best guess.

FedEx? what are you talking about? Even they have a warranty policy and have coverage for your damaged package if it is their fault. Do the web portals have that kind of coverage if they damage(alter/convert) your appraisal/package? No! if course not. It would be a miracle if they did. At least FedEx is looking out for thier customers.

 

[PropertyEconomics]

Eithway, we are still in jeopardy, because they are trying to lay the burden on the appraiser about the conversions and ability to tamper with the reports. Not just for FNC, but all those other portals and software companies that might have it coming to them from the Stockholders, Congress, and American Public. That is my best guess.

FedEx? what are you talking about? Even they have a warranty policy and have coverage for your damaged package if it is their fault. Do the web portals have that kind of coverage if they damage(alter/convert) your appraisal/package? No! if course not. It would be a miracle if they did. At least FedEx is looking out for thier customers.

Work .. I think you are right. There would be no other reason to have a hold harmless clause in a contract where the vendor only acted as a middle man for delivery. Id not sign the contract because my attorney has advised me there is way too much liability with what they may do with my product.
Apparently Mr Wileys attorney doesnt agree. Such are horse races.

 

[DWiley]

There would be no other reason to have a hold harmless clause in a contract where the vendor only acted as a middle man for delivery.

Really? No other reason? So, are you saying that Alamode uses hold harmless/indemnification language for Xsites for the same reason?