Title abstractors research and document property ownership and other records for land that is being purchased or transferred. This work could lead to a number of risks, including lawsuits alleging that you made mistakes in your work or accidental property damage. It’s a good idea to protect your business by purchasing a range of business insurance that can provide financial support in the event of an expensive lawsuit or other incident. 

What insurance coverage do I need as a title abstractor?

Errors and Omissions Insurance

Errors and omissions insurance (also known as professional liability insurance) provides coverage if you are sued due to negligence, mistakes, or omissions in your professional work. When title abstractors research the history of a property, it’s possible that they may inadvertently miss key issues with the property’s ownerships, liens, or other encumbrances. This could alter the validity of the sale or property transfer, leading to financial losses for clients. Errors and omissions insurance can step in to pay for claims related to your work as an abstractor. 

Example:

• It’s discovered that a property was sold with a lien still outstanding. Because of this error, the sale falls through. The seller sues your firm for negligence. 

Workers’ Compensation insurance

Workers’ compensation insurance provides financial and medical benefits for employees who are injured or fall ill on the job. Accidents in the office are a commonplace occurrence, from trip-and-fall incidents to repetitive strain injuries. As an employer, it’s wise to make sure that your employees are covered in case they suffer an injury and are unable to continue working in their usual capacity.

Additionally, workers’ comp is legally required coverage for companies with employees in almost all states. While the benefit amounts and eligible injuries may differ by state, in general, workers’ comp is must-have coverage. Failure to secure adequate coverage or any attempts to avoid complying with local workers’ comp regulations may result in heavy fines and a potential shutdown of your business.

Example:

• One of your employees is moving a heavy box of office files into storage. While lifting the box, he injures his back and requires medical attention. He is unable to work for the next six weeks while recovering and undergoing physical therapy. Workers’ compensation would provide compensation for a portion of his income, as well as cover his medical expenses.

Commercial Property Insurance

Commercial property insurance provides protection for your business property, including buildings, furniture, equipment, and tools. This coverage can protect your offices if a disaster occurs. Commercial property insurance will provide funds to replace or repair your business property if it is destroyed or damaged by a covered peril such as fire, explosion, storm, vandalism, and more.

Commercial property insurance covers the following:

• Buildings belonging to or leased by your company
• Contents of the building, including furniture, equipment, and tools
• Property of others while it is under your care, custody, or control

Example:

• During a heavy storm, a tree falls against your office’s wall, breaking windows and damaging the wall. Commercial property insurance would cover repairs. 

Commercial Crime Insurance

Commercial crime insurance can protect your business from financial losses related to crimes such as theft, burglary, robbery, forgery, and fraud. While crime coverage can protect you from both third-party crime and employee dishonesty, the risk for title abstractors comes primarily from internal actors.

Employees of your business may have access to records that affect customers’ property values and salability, and they may also be privy to billing, ordering, and funds disbursements. While thorough background checks and office security practices may help, they are far from foolproof. Commercial crime insurance can provide coverage in case your business suffers losses due to employee fraud, theft, or crime.

Example:

• An employee in your billing department has been fraudulently charging customers and pocketing the payments. Commercial crime insurance would cover your company’s losses.

General Liability Insurance

General liability insurance provides funds to protect your company from claims of accidental third-party bodily injury, property damage, and personal injury. As a title abstractor, clients may visit your office or your clients may visit other locations, and there’s always a possibility that an accidental injury or property damage will occur. General liability insurance can cover medical fees, legal costs, and settlements.

Examples:

• Bodily injury: While visiting your office, a client trips in a poorly lit stairwell and falls down the stairs, breaking his collarbone. General liability insurance would cover his medical costs. 
• Property damage: One of your employees visits a courthouse while researching a property and accidentally spills coffee onto a computer, damaging it. General liability insurance would cover the damages. 

Business Owner’s Policy

For small or midsize title abstractor businesses, a business owner’s policy (BOP) could be the simplest way to obtain a wide range of coverage. A BOP combines general liability, property, business income, and extra expense coverage into a single convenient package. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.

Additional Coverages

• Hired and non-owned auto coverage may be necessary if your employees drive their personal vehicles for work purposes. Personal auto insurance may not be sufficient to cover the expenses if you or your employees cause an accident while driving as part of the job.
• Employment practices liability insurance protects your business against lawsuits by employees who accuse your business of wrongful treatment, including discrimination, harassment, or other employment-related issues.
• Cyber liability insurance can protect your business against liability and property losses caused by cyberattacks such as hacks, data breaches, denial of service attacks, and viruses. Your business may store sensitive customer data that includes contact information, financial records, and more, which could be a target for hackers or other cybercriminals.

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a title abstractor with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for title abstractors:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word 

As a title abstractor, there are a variety of risks that could affect your company. A broad range of business insurance can help you cope with any unexpected disasters, whether it’s a lawsuit brought by a client who believes you acted negligently or a disaster that damages your offices. Ensuring that your company has the right coverage can provide valuable financial support if an incident occurs, while also giving you and your clients greater confidence in your business.