FDIC Exclusions in Appraiser E&O Policies

Many appraisers don’t know about or don’t understand the new FDIC and “regulatory agency” exclusions found in many appraiser E&O policies. Why is it relevant to know if your policy has an FDIC or regulatory agency exclusion of some sort? The main reason is because the FDIC sues appraisers for professional negligence — such lawsuits are discussed in prior posts: here and here.

How do you determine if a policy being offered to you contains an FDIC exclusion? First, no policy sold by LIA in its appraiser E&O program contains any FDIC or similar regulatory agency exclusion. If you are not purchasing E&O insurance in LIA’s program, what you need to look for are the common exclusions shown below. When they apply to a policy, these exclusions are usually added as endorsements, typically at the end of an appraiser’s policy.

Navigators Insurance Company

The following exclusion is applied as an endorsement to many appraiser E&O policies issued by Navigators in states where appraisers are at higher risk for being sued by the FDIC. The effect of the endorsement is to exclude coverage for damages in any claim by the FDIC or by any similar federal or state regulatory agency and to cap the attorneys’ fees available to defend such a claim.

Navigators FDIC Exclusion

Great American Insurance Group.

Great American may soon offer a new appraiser E&O program.  Great American may apply the following FDIC exclusion endorsement to appraiser E&O policies — it’s not known at this time whether the endorsement will actually be applied to policies that it may sell to appraisers:

Great American, Appraiser FDIC Exclusion

General Star

The following exclusion is added in an endorsement to many appraisers E&O policies from General Star:

General Star -- FDIC Exclusion (Prior Acts before 8-1-08)

Five Star/Lloyd’s

The exclusion below is found within the main policy text of many Five Star/Lloyd’s appraiser E&O policies:

Five Star-Lloyd's -- FDIC Exclusion


The exclusion below is contained in endorsements to some E&O policies from CNA:

CNA -- FDIC Exclusion

Peter Christensen
Peter Christensen

Peter Christensen

Peter Christensen is an attorney, licensed in California and Washington. His legal practice primarily serves the real estate valuation community - Valuation Legal. He's the author of Risk Management for Real Estate Appraisers and Appraisal Firms, published by the Appraisal Institute.

You may also like...

3 Responses

  1. Retired Appraiser Retired Appraiser says:

    Nice ad! Now if you can just get your cost in line with the appraiser’s subminimum wage income. LOL

  2. Baggins Baggins says:

    Oh boy, I’m going to have to call Landy up. If they’re denying the most important faction of coverage, I’m going to drop them and go with LIA. Perhaps I’ll look closer at the new state policy, but that new group policy is only 300/600, and most lenders want the 500/1m.


Leave a Reply

We welcome critical posts & opposing points of view. We value robust & civil discourse. You may openly disagree, but state your case in an atmosphere of mutual respect, in which everyone has a right to a particular view about the topic of conversation. Please keep remarks about the topic at hand, & PLEASE avoid personal attacks. If the poster gets you upset, it is the Internet, you can walk away from it.

Personal attacks harm the collegial atmosphere we encourage on AppraisersBlogs.

Your email address will not be published. Required fields are marked *

xml sitemap

FDIC Exclusions in Appraiser E&O Policies

by Peter Christensen time to read: 1 min