2003 errors & omissions claims analysis.

Author:Wiley, Robert C.
Position:Insurance Connection
 
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THE NUMBER AND TYPE OF ERRORS AND OMISSIONS CLAIMS HAVE CHANGED SIGNIFICANTLY SINCE 1987. Today, unlike the 1980s, it is not unusual for the appraiser to be included in most real estate lawsuits along with the other professionals, e.g., real estate agents, termite inspectors, etc., involved.

In 1987 the most common complaint came from lenders. Not surprising in this age of consumerism, today the most common complainant is the borrower.

Gaglione & Dolan, who monitor the Liability Insurance Administrators claims, evaluates each case on its merits. It is committed to providing a vigorous defense, even where it would be less costly to simply settle. Over 500 claims were received during the past two years. To date, 33 of those claims have settled and 41 have been dismissed by the courts.

The 337 claims presented during 2003 represented an increase of 20 percent over the previous year. Of these, 30 percent were administrative complaints, which are usually complaints, made to state licensing boards against appraisers. When faced with an administrative complaint, the appraiser is well advised to act as quickly as possible to contact the E & O carrier for advice on how to respond to the licensing board's requests. Of those administrative complaints covered under the E & O program, the vast majority are closed with no violations found and no action taken. At this time, only three files with state board complaints reported have resulted in disciplinary action imposed against the appraiser. (See LIA's Web site, www.liability.com to read the Claim Alert, "A Licensing Board Administrative Notice," on how to address these complaints and minimize your risk.)

Complainant trends

Repeat claimants, claimants who bring multiple suits, are observed closely to detect exploitive trends. An especially strong defense is put forth in these matters. We hope to discourage the proliferation of claims by avoiding "cost of defense" settlements. Many well-known national mortgage companies and lenders are involved and constantly being monitored.

The same holds true for certain plaintiff counsel who appear to have targeted insured appraisers in their regions, be it Los Angeles; Dayton, Ohio; or Charleston, West Virginia.

Seventeen years ago the sun belt states provided much of the litigation against appraisers, with California, Arizona, Texas and Florida providing most of the claim activity. In 2003 there were claims from 44 states, with Michigan, California, Ohio and...

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