Roads unknown
Proceed with caution
Q: " I just got a call from a lender/client about a new assignment and I am not sure what to do. The client says this is not an appraisal, but the form he wants me to fill out has a space for intended use and intended user, has a grid for comparison of 3 comps, states that it is prepared in compliance with USPAP and has appraisal certifications at the end. If I do this report for my client, is it covered under my E&O policy? I don’t want to turn down work, but I don’t want to do something to void my insurance either."
A: Many lenders are coming up with alternative products that they claim to be more efficient or more useful than standard appraisals. You are wise to make sure that your work will be covered before you agree to do it. The key to coverage under your policy is whether or not this product is something that would “ordinarily and customarily” be performed by an appraiser. If anybody out there, appraiser or not, could prepare the product in question, then there might be a coverage issue. In this case, since the report is being done in compliance with USPAP and since appraiser certifications need to be attached…it sounds like you are fine. Of course, until such time as an actual claim is made no one can make a final decision with regard to coverage under any policy.