Mortgage Errors and Omissions (a Liability coverage) policies protect you as a lender/mortgagee if you fail to require, procure or maintain your customary coverage on real property collateral, and a loss occurs to the mortgaged property.
Optional extensions of Mortgage Errors and Omissions coverage include:
Real Estate Tax Liability: Protects the lender against errors and omissions relating to non-payment of real estate taxes by the lender on behalf of the borrower.
Life and Disability Insurance: Protects the lender in the event of non-payment of mortgage life, accidental death or disability on behalf of the borrower.
Failure to Determine Flood Zone Liability: Covers the error or omission arising out of lender’s duty to determine whether or not a particular property is in a flood zone.
Compliance Procedures: Covers failure to maintain private mortgage insurance, and compliance with requirements from FNMA, FHLMC or GNMA.