Tagged: E&O

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Difference Between an Employee, a Subcontractor, & an Independent Contractor

What is the Difference Between an Employee, a Subcontractor, and an Independent Contractor? In helping real estate professionals find the right professional liability (E&O) insurance policy, one of the most common issues we come across is whether someone you hire to help with your intermittent workload is an employee, a subcontractor, or an independent contractor. The IRS perspective vs. the insurance perspective This is often confusing because what you intended to do may not be what you actually end up doing. There are a number of reasons for this. First and foremost is the fact the IRS will view this...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions

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What You Say Can and Will Be Used Against You

Does this sound familiar? If so, I hope it’s because you watch a lot of shows like Law & Oder on television and not for any other reason. If this doesn’t sound familiar, it is one part of the Miranda warning police must give to criminal suspects before questioning them. How does that apply to you? Well, it can have equally negative consequences in a civil case (insurance claim) also. To see if you need to read any further, take this short quiz. If you answer “yes” to any one of these questions, you’d better read it all. Do you...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions

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Class Action Lawsuit Filed Against BPO and AMC Firms for Allegedly Unpaid Fees

Unpaid BPO Fees Class Action On December 2, 2013, three law firms in Florida, Washington and Colorado teamed together to file a class action complaint on behalf of real estate agents and others allegedly owed unpaid fees for broker price opinions ordered by BrokerPriceOpinion.com. The complaint also names three-related companies First Valuation, LLC, First Valuation Services, LLC, and First Valuation Technology, LLC as defendants on the basis that they are “alter egos” of BrokerPriceOpinion.com and do not have true corporate separateness in their operation. The lawsuit was filed in federal court in Colorado, where the defendants are based. The named plaintiff in...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / E&O

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Subpoenas and Other Things That Go Bump in the Night

First, it is gratifying to know you are actually reading what we write and release. We know this is true because a little over a year ago, we received very few questions about subpoenas and today, after writing a little warning piece on the now infamous FDIC subpoenas being issued to appraisers by a private law firm, we get lots of questions. In fact, we get so many we decided to put together a short follow-up piece on different kinds of subpoenas and how to handle them. These are presented in ascending order of concern with the final one being...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions / FDIC

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Regulatory Claims Exclusion

Navigators Sues More Appraisers to Deny Coverage under “Regulatory Claims” Exclusion Last Thursday, November 14, Navigators Insurance Company sued two more appraisers to enforce “regulatory claims” exclusions in the E&O policies they purchased. These appraisers are in Nevada. Like the appraiser sued by Navigators in Florida on November 6, the Nevada appraisers are being sued by the FDIC for professional negligence in cases filed about a year ago. The objective of Navigators’ lawsuits is to seek court confirmation of Navigators’ legal position that there is no coverage under Navigators’ policy for damages awarded against the appraisers to the FDIC, which is demanding about $500,000...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / E&O

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AMC Background Checks: Fair or Not?

“I was just asked by an AMC to get a background check. Do I have to comply?” As risk management advisors for Appraisers and Inspectors, this is one of the questions we hear over and over again. Let’s face it — appraisal fees are lower than ever before. Essentially, AMCs are asking you to do the same amount of work for less pay. In some cases, they’re even asking you to do more work. Does it make sense then that you have to get a background check in order to work for a specific AMC? Unfortunately, the increased costs associated...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / E&O

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FDIC Lawsuit Against Appraisers in CO

Federal Court Rules on USPAP Confidentiality Issue in FDIC Lawsuit Against Appraisers in Colorado On September 5, 2013, in a professional negligence case against two Colorado appraisers by the FDIC, a federal court ruled on an issue concerning USPAP confidentiality.  It was a simple issue, but it’s one of the very few court decisions relating to USPAP’s poorly written confidentiality rule (this previous post here explains why the rule is poorly written).  This is the rule: An appraiser must not disclose: (1) confidential information; or (2) assignment results to anyone other than: the client; persons specifically authorized by the client; state appraiser...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions / FDIC

Financial Crisis Looming 2

Liar, Liar…Pants on Fire

My money is definitely on another financial crisis I recently read a summary of an interview of James Gorman, CEO of Morgan Stanley. When Gorman was asked about the chances of another financial crisis like the one we had 5 years ago occurring, he replied that “the probability of it happening again in our lifetime is as close to zero as I could imagine”. To this statement, my reply is quite simply “bull—-!” Here are the reasons why another financial crisis can happen in the next few years. Government and personal debt remain at unsustainable levels. The US budget is...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions / Fannie Mae - Freddie Mac

AMC License Bonds 1

AMC License Bonds. Are They Working?

Are AMC Bonds Working? Current AMC Bond Requirements Eighteen states now require AMCs to carry surety bonds to be properly registered to operate in those states. The required bond amounts vary from $10,000 in New Mexico to $100,000 in Washington.  A list at the end of this post shows the required bond amounts in each state. Are AMC Bonds Working? The requirement for AMCs to carry bonds serves two purposes. First, the bond assures that if an AMC fails to comply with its financial obligations under a state’s AMC law, there will be funds available up to the limit of the bond...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / E&O

Appraisers E&O FDIC Exclusions - Image courtesy of Stuart Miles / FreeDigitalPhotos.net 3

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...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions / FDIC

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