For those who don't understand Errors and Omissions insurance (E&O) in the P&P industry, here's a quick primer:
General Liability: covers you for work you performed
Example: you install a new staircase; somebody falls on the staircase and gets hurt - they claim your work was defective - GL pays to defend you or pays the claim
E&O: covers you for information you provided (or should have provided) - hence the
ERROR or OMISSION
Example: you fail to report a roof leak even though your photos show water stains on the ceiling - client claims you are responsible for all the new water and mold damage - E&O policy may cover the loss
In many cases the quality of the work you perform is
FAR less relevant than the information you provide to clients. In P&P, the banks and nationals woefully underpay for the information they hold vendors accountable for - they expect full-blown home inspections to be covered by the fee to change a lock, winterize, or even for the privilege of submitting a bid (i.e. free).
So why do nationals require you to use their select E&O carriers?
1) It's easier for them to submit a claim against your policy; especially after you quit doing work for them because you figured out that it's not worth it
2) They argue that these "select" carriers have a better understanding of the P&P industry (honestly, they probably do have a better understanding)
3) It's easier for them to submit a claim against your policy; especially after you quit doing work for them because you figured out that it's not worth it