The following descriptions of policy coverage and features are intended to give our appraiser clients a basic explanation of insurance terms used on our Website. We are obligated to tell you that wherever these explanations may differ from actual policy language, the policy language always prevails. If you would like a copy of the policy, simply send us an email and we’ll be happy to send one to you.
Also known as Malpractice Insurance or Errors and Omissions (E&O) coverage, this coverage protects you and your company in the event a client alleges they have suffered a loss as a result of an error or an omission committed by you in the delivery of your professional services. For example:
Professional Liability covers your organization, your professionals and/or employees in the course of providing professional services to your clients. In addition to paying for covered damages, the policy available through Target also pays for legal defense costs --- even if the claim is bogus. Considering that the cost for legal services can quickly add up to thousands of dollars (even hundreds of thousands), defense cost coverage is critical.
Your claims made and reported policy from Target covers only those negligent acts or omissions that occurred during the policy term. You must have known about the claim (thus “claims made’) and “reported” it to the insurance company during your policy’s twelve month term.
However, the optional Prior Acts Coverage described below is designed to protect you against claims that may have occurred before your policy effective date. And the optional Extended Reporting Period (also described below) affords you more time to report a claim that occurred during the term of your policy.
Because there is often a lag between the time services are rendered and when a
potential claim is made known, Prior Acts provides coverage for professional
negligence claims that arise from services rendered prior to the current policy’s
effective date. The Retroactive Date is the date back to which Prior Acts
Coverage is effective.
Because there is often a lag between the time services are rendered and when a potential claim is made known, Prior Acts provides coverage for professional negligence claims that arise from services rendered prior to the current policy’s effective date. The Retroactive Date is the date back to which Prior Acts Coverage is effective.
Target’s Policy: If your Professional Liability coverage has been continuous, we offer optional Prior Acts Coverage as far back as 2010.
Here’s an example that may help:
If the term of your claims made policy is from January 1, 2014 – January 1, 2015, and you have Prior Acts Coverage with a retroactive date back to January 1, 2010, your current insurance company would be responsible for claims that occurred anytime after 1/1/10 if those claims are reported during the policy term (1/1/14 – 1/1/15). Because the insurance company is accepting exposure for a longer period of time, there is an additional premium for Prior Acts Coverage.
You may know this as “Tail Coverage.” Almost the opposite of Prior Acts Coverage, an ERP extends the time during which a negligent act or omission that occurred during the policy term can be reported as a claim to the insurance company. With an ERP, claims that would have been covered during the policy term are covered during the term of the ERP.
Target’s Policy: We offer Appraisers clients the option to purchase a 12-month ERP. Should your policy ever be non-renewed for any reason, you will still have the option to purchase an ERP at that time.
The Appraisers Professional Liability Policy offered through Target includes a generous definition of who is covered under your policy: current and former firm principals, partners, employees, and independent contractors (for acts performed on your behalf).
Here comes a bit of technical insurance language! As defined in the Appraisers policy, Professional Services means services rendered or required to be rendered by the “Insured Member” for others in its capacity as a real estate appraiser of residential real estate of four units or less for a fee if and only if:
1. The “Insured Member” that performed any “professional service” is properly licensed or certified at the time of the act, error or omission giving rise to the “claim” and as long as such service is rendered on or behalf of the client or customer in return for a fee, commission or other compensation; the “Insured Member” is in compliance with any law or regulation, state, federal or local, including any appraisal licensing requirements for appraisers which may apply to the location in which the “Insured Member” performs appraisal services; and
2. The appraisal is on residential property of four units or less, agricultural property or light commercial property of less than 50,000 square feet and maximum of four stories.
The policy offered through Target is described on page one of the policy as a Risk Purchasing Group Master Policy. A Risk Purchasing Group is simply a legal entity that allows a group of unassociated businesses with similar risk characteristics (e.g., Real Estate Appraisers) to take advantage of a joint insurance purchase at significant cost savings. When you purchase coverage through Target, you automatically enjoy the cost- saving benefit while also enjoying your own coverage limits that are separate and distinct from other members.
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