I have an LLC that purchases and holds performing notes. Payments are collected by the note servicer. I'm looking into purchasing liability insurance as a risk mitigation technique for lawsuits caused by negligence. This would likely be in the realm of errors and omissions - i.e. did the servicer fail to provide the correct notice, incorrectly calculate payments reduction in UPB, or a borrower files a suit if I am put in a position where we are trying to renegotiate a delinquent note (either myself or the servicer). I know some would say that it is the servicer's responsiblity to carry liability coverage, but that will certainly not prevent a suit from being filed against my LLC.
I have some questions and would appreciate your feedback:
- What type of insurance do you carry to help mitigate these risks and who is your insurer?
- What is the approximate cost of this coverage?
- Do you have an insurance agent in mind that you recommend who has experience helping shop around this type of coverage?
Thank you for your time
Perhaps another good question to ask, in addition to the above questions, is:
If you don't carry liability coverage, what factors contributed to your decision?
Also - feel free to message me if you'd prefer to discuss these items offline.
Great topic! Did anyone respond to you offline? If they did, can you share the information without disclosing the innocent party? :)
I'm working on this very topic myself. Let's regroup in say a month and see what we both find out!
Kimberly Banks Fawcett
Inspired Capital Group