E & O Insurance Tail/extended Coverage

[Heather1277]

Good morning everyone! I am in need of my fellow appraisers advice/opinions. I have been an appraiser for 15 years now (including trainee years) and have currently owned my own business for 8 years. I have recently been offered and accepted a position with a local County as an appraiser technician. Per the County I cannot perform my own appraisals as it is considered a conflict of interest. So within the next month or so, I will no longer be able to do any type appraisals for my own business.

My question/concerns are what are your opinions on tail/extended E & O coverage?

I have always carried a high coverage for my E & O ($1,000,000) policy. I spoke with my insurer and they told me that they offer tail covered available in 1 - 5 years increments. With 1 year being 100% of my current premium, 2 year 120%, 3 year 185%, 4 year 195% & 5 years at 200%. I only have a onetime option to purchase this coverage.

My current E & O policy does not expire until January 2017. As my probationary period is 6 months I, of course, will keep my current policy in place until then.

What say you.....

 

[hastalavista]

I'd buy the tail insurance for the same reason I buy the current insurance. As protection against a potential claim.

Some appraisers I know only have current E&O because some of their clients require it.

So, if you are concerned about a liability, I'd get the tail insurance.
If the only reason you have E&O is because your clients require it, then you probably don't think it is necessary if your new employer doesn't require it.

Peace of mind vs. cost of coverage. Take your pick and good luck!

 

[sail143]

Tail coverage is peace-of-mind which for me was/is very important. I would not go without it.

 

[Vermonter]

As you are still planning on keeping your professional license, then yes you want to be covered for past work. You should talk to your current provider to see what they offer for your situation.

 

[Heather1277]

I will definitely be purchasing the tail coverage if just for peace of mind. I am thinking about getting the 3 year coverage.
Also I will always keep my license current as you never know what the future will bring....

 

[Terrel L. Shields]

The cheap way is to put Guido the Enforcer on retainer. He charges by the tooth.

 

[KHS445]

Considering where the price breaks fall I would definitely recommend going with the five years of coverage. Two primary reasons; first if you are going to work for the County within the next month the five years of coverage (along with your current policy) will cover you for five and a half years, second should anything happen (your choice or theirs) with your new position it would probably be easier to reinstate coverage with your current insurance company if you have existing (even if tailing) coverage.

Not sure where you are located in California and how far you are from neighboring Counties, but you might talk to your employer (after your have been working for a while) about performing appraisals in other Counties. I recognize that competency, travel, MLS fees, etc. would all be factors. Maybe you could hook up with an existing shop in a neighboring County to help with their overflow.

Good Luck.

 

[glenn walker]

I would get the 5 year tail-end insurance because most litigation in appraisals is normally 3 to 6 years after the fact and even though you had insurance at the time it becomes null & void when it expires. The other issue is if you ever did get sued and lost the case the dollar damages could bankrupt you. I noticed you are also located in California which is a litigious group of wonderful people : )

 

[Heather1277]

I would get the 5 year tail-end insurance because most litigation in appraisals is normally 3 to 6 years after the fact and even though you had insurance at the time it becomes null & void when it expires. The other issue is if you ever did get sued and lost the case the dollar damages could bankrupt you. I noticed you are also located in California which is a litigious group of wonderful people : )

That is exactly my concern Glenn! Also what else I have found out is that the statue of limitations in CA is 3 years. However the courts can rule that the 3 years is from when the suit gets filed and not necessarily the effective date of the appraisal.