Every active mortgage loan originator licensee will need to secure an Errors and Omissions insurance policy.
Colorado E&O insurance is also appropriate coverage for anyone who gives advice or makes educated recommendations such as accountants, software developers, and real estate agents.
What is Colorado Errors and Omissions Insurance?
Colorado Errors and Omissions Insurance (also know as Colorado E&O insurance) is an insurance policy that protects you in the instance of an unintentional error or omission while performing your duties. Colorado E&O insurance can protect you from losses even if you haven't made a mistake.
Colorado E&O insurance does not protect you from the following:
Intentional, dishonest, or fraudulent acts
Improper gain to which you are not entitled to
Class action lawsuits
Commingling of money
Inability or failure to pay or collect money
This insurance will help you manage legal fees if a client states that you or others in your business have been negligent.
For example, if a client feels that he was eligible for a different mortgage product but you did not tell him this, he could sue you for the difference between the two rates. While it may have been a simple error on your part, it could turn into an expensive mistake. You could avoid paying for this mistake if you have E&O insurance.