I am beginning to see a lot of this transpiring with both lenders and title companies. We carry $1,000,000.00 of coverage for malpractice which includes title abstracting, closings and the other areas under which our firm practices. We seem to be picking up a lot of closing work from signing agents because typically they can not get insurance coverage in that amount or because it is cost prohibitive for them.

Some of the calls we get inquiring as to our insurance coverage are laughable because the party on the other end of the phone has no clue as to how the coverage works. Recently I was asked to give a client a written assurance that they were covered under our policy. I explained that they were not the parties covered, but rather I was the party covered. They were the claimants against my policy in the event of a problem. They seemed to have a great deal of difficulty understanding the concept.

Once in a while we have a client request that we include them on our policy as a loss payee. We never agree to it because the client is adequately paid under the policy as a claimant. Amending the policy every time someone asks for this is more trouble than it is worth, and we generally pass on the closing if the prospective client is unwilling to accept our policy as is.

Whether a client chooses to do business with your firm because of insurance coverage issues is a business decision they make. You will have to determine if the volume of business justifies the expense of the increased premium.