Before you start working in the mortgage industry, you must get a mortgage license. One of the requirements to become a loan officer in Colorado is to purchase Colorado Errors and Omissions Insurance. This is different from a Colorado Mortgage Loan Originator Bond.
What is Colorado Errors and Omissions Insurance?
Colorado Errors and Omissions Insurance (also know as Colorado E&O) is an insurance policy that protects you in the case that you make an unintentional error or omission when 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
- Punitive damages
- 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 let him know that this was the case, 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 that could cost you your business if you do not have insurance.
View other Colorado E&O Insurance examples.
By not purchasing Colorado E&O insurance, you/your company could face serious financial hardships, as stated above.
Who Needs Colorado E&O Coverage?
If you are trying to get your Colorado Mortgage Loan Originator License, you will need to get Colorado E&O insurance. 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.
How Much Does a Colorado E&O Policy Cost?
In Colorado, E&O Insurance has a fixed amount of $500,000, so you don't need to worry about choosing how much insurance you will need.
The best time to buy Colorado E&O insurance is before you need it. At Surety Solutions, we are able to issue you an E&O policy same-day.