Mike Seward
Senior Member
- Joined
- Jan 23, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Florida
This is the response (in part) from an LIA (LSI) attorney
"........However, from the insurance viewpoint, you should still be concerned about the agreement because of the indemnification provision contained in paragraph 8. The reason you should be concerned is that, like all professional liability policies, your E&O policy does not cover claims against third parties (i.e., the policy covers claims against you because you are the insured) or liabilities assumed by contract. In the indemnity provision of this agreement, you are agreeing very broadly to pay all of AppraisalPort's losses, damages, expenses, etc. which might result from any aspect of an appraisal delivered through AppraisalPort
-- even if, the loss or damage is the result of AppraisalPort's own "sole negligence." In doing so, you are agreeing to pay potential costs and damages that are broader than can be covered by your insurance.
Indeed, as an example, you are agreeing to pay for losses not only due to your own potential mistakes, but also due to AppraisalPort's own negligence (if AppraisalPort, for example, chopped up one of your reports or deleted important information) and agreeing to pay AppraisalPort to defend against its own negligence. To the extent that such contractual obligations assumed by you in the agreement with AppraisalPort are broader than the liability you would otherwise have without the agreement, they are not covered by insurance. Thus, AppraisalPort's terms and conditions do expose you to potential liability that is not covered.
Based on our experience in reviewing other agreements of this nature affecting appraisers, the indemnity provision in the contract here is egregiously one-sided, particularly in light of the importance of AppraisalPort's proper handling of appraisal reports and data and the fact that use of AppraisalPort is forced upon you by FannieMae and other entities. .........
........
Whether you choose to accept the user agreement will have to be your business judgment based on the risks and rewards of doing business through AppraisalPort. We do sympathize with you, however, for the difficult position that AppraisalPort has placed you in and we would suggest that you voice your displeasure to AppraisalPort and the lenders and institutions which require that you use AppraisalPort. We intend to pursue such efforts as well on behalf of our 33,000 insured appraisers........"
There have 100 or so posts in two threads establishing the fact that an appraiser should not sign this agreement.
Now, having said that, what do we do?
Those of you that have good clients using AP that have decided you won't sign the agreement, what do you plan to do?
"........However, from the insurance viewpoint, you should still be concerned about the agreement because of the indemnification provision contained in paragraph 8. The reason you should be concerned is that, like all professional liability policies, your E&O policy does not cover claims against third parties (i.e., the policy covers claims against you because you are the insured) or liabilities assumed by contract. In the indemnity provision of this agreement, you are agreeing very broadly to pay all of AppraisalPort's losses, damages, expenses, etc. which might result from any aspect of an appraisal delivered through AppraisalPort
-- even if, the loss or damage is the result of AppraisalPort's own "sole negligence." In doing so, you are agreeing to pay potential costs and damages that are broader than can be covered by your insurance.
Indeed, as an example, you are agreeing to pay for losses not only due to your own potential mistakes, but also due to AppraisalPort's own negligence (if AppraisalPort, for example, chopped up one of your reports or deleted important information) and agreeing to pay AppraisalPort to defend against its own negligence. To the extent that such contractual obligations assumed by you in the agreement with AppraisalPort are broader than the liability you would otherwise have without the agreement, they are not covered by insurance. Thus, AppraisalPort's terms and conditions do expose you to potential liability that is not covered.
Based on our experience in reviewing other agreements of this nature affecting appraisers, the indemnity provision in the contract here is egregiously one-sided, particularly in light of the importance of AppraisalPort's proper handling of appraisal reports and data and the fact that use of AppraisalPort is forced upon you by FannieMae and other entities. .........
........
Whether you choose to accept the user agreement will have to be your business judgment based on the risks and rewards of doing business through AppraisalPort. We do sympathize with you, however, for the difficult position that AppraisalPort has placed you in and we would suggest that you voice your displeasure to AppraisalPort and the lenders and institutions which require that you use AppraisalPort. We intend to pursue such efforts as well on behalf of our 33,000 insured appraisers........"
There have 100 or so posts in two threads establishing the fact that an appraiser should not sign this agreement.
Now, having said that, what do we do?
Those of you that have good clients using AP that have decided you won't sign the agreement, what do you plan to do?
