Utah Errors and Omissions Insurance for Mortgage Brokers

We provide errors and omissions (E&O) insurance to Utah mortgage brokers and mortgage bankers who offer all types of residential and commercial loans, including hard money loans and reverse mortgages. We also provide all other coverages that Utah mortgage professionals might need, such as workers' compensation, general liability, and office packages.

What's the difference between Utah mortgage brokers and mortgage bankers?

Mortgage brokers and mortgage bankers in Utah perform essentially the same tasks. The major difference between the two is that mortgage bankers provide the funds for the loans they make while mortgage brokers do not use their own funds and act solely as the intermediary between the lender and the borrower.

Another difference is that mortgage brokers have access to multiple lenders and can offer their customers various options while mortgage bankers typically only offer their own loans.

Why should Utah mortgage brokers carry E&O insurance?

Utah mortgage brokers must complete multiple steps and tasks between the loan origination and loan closing. Any error or omission (whether real or perceived) made by a mortgage broker during that process could give rise to an E&O claim.

In fact, Utah mortgage brokers and mortgage bankers can be sued for a variety of reasons regarding any problem that may occur in a real estate transaction, even if no error or omission was made. This type of lawsuit typically involved the plaintiff naming all parties in a real estate transaction, including the real estate broker, the title company, the escrow company, and the mortgage broker.

Whether the lawsuit is justified or not, Utah mortgage brokers and mortgage bankers face costly litigation and the possibility of having to pay significant damages. It is therefore vital for mortgage brokers and mortgage bankers to have the proper E&O insurance protection.

What are some common exclusions in E&O insurance policies for Utah mortgage brokers?

Utah mortgage brokers should be aware that E&O insurance policies are not meant to cover every claim that they could face. E&O insurance policies contain multiple exclusions, such as:

• Loan repurchases
• Intentional, dishonest, malicious or fraudulent acts
• Improper gain or advantage to which the insured is not entitled to
• Class action lawsuits
• Claims brought by an insured against another insured under the same policy
• Punitive damages
• Commingling of money
• Inability or failure to pay or collect money
• Bankruptcy or insolvency of a lender
• Defective title or deed

The policy exclusions can vary significantly between insurance companies. Utah mortgage brokers should therefore review their E&O insurance fully, including all exclusions and endorsements, to make sure that the appropriate coverage is provided.

It is also important to point out that E&O insurance policies are provided on a claims made basis. This means that Utah mortgage brokers must have continuous coverage in place, from the time the act, error or omission that gives rise to the claim occurs, until the claim is reported to the insurance company. Any lapse in coverage can cause the loss of the retroactive date, which means that prior acts will not be covered.