Mortgage broker insurance is a type of insurance designed for mortgage brokers. It provides coverage for the broker’s mistakes, negligence, and errors, as well as for any losses incurred due to the broker’s activities. The coverage is typically provided by an insurance company and is tailored to meet the specific needs of mortgage brokers. It typically includes liability insurance, professional indemnity insurance, and property damage insurance.
Who Needs Mortgage Broker Insurance?
Mortgage brokers need to have a specific type of insurance that covers their business. This type of insurance is known as mortgage broker insurance and is designed to protect mortgage brokers from claims of negligence and malpractice, as well as provide coverage for other losses that may arise from the business of offering mortgages. Mortgage broker insurance is also required by law in some states. In order to obtain this type of insurance, mortgage brokers must contact an insurance provider that offers this type of policy.
Types of Mortgage Broker Insurance
Mortgage brokers must maintain insurance to protect their clients and their business. Types of insurance typically required for mortgage brokers include:
1. Professional Liability Insurance: This type of insurance protects a mortgage broker from claims of negligence and errors in their professional services.
2. Errors & Omissions Insurance: This type of insurance covers mortgage brokers for errors and omissions related to their work.
3. Fidelity Bond: This type of bond protects a mortgage broker against dishonest actions of employees.
4. Workers’ Compensation Insurance: This type of insurance covers medical expenses and lost wages for employees who are injured on the job.
5. Commercial Property Insurance: This type of insurance covers a mortgage broker’s office, furniture, and equipment in the event of damage or loss.
6. Cyber Liability Insurance: This type of insurance covers a mortgage broker for losses related to data breaches, cyberattacks, and other cyber-related issues.
How Much Does Mortgage Broker Insurance Cost?
Mortgage broker insurance can vary greatly in cost depending on the type of coverage, the amount of coverage, and the risks involved. Generally speaking, however, you can expect to pay anywhere from $500 to $5,000 per year for a basic policy.
Mortgage Broker Insurance Requirements
Mortgage brokers are required to carry professional liability insurance, also known as errors and omissions insurance. This type of insurance protects against claims arising from alleged mistakes or negligence in providing advice and services related to mortgages. In some states, mortgage brokers may be required to carry other types of insurance, such as workers’ compensation, disability, and bonding. It is important for mortgage brokers to consult their state’s laws and regulations to ensure that they are meeting all of the necessary insurance requirements.
Commercial Insurance And Business Industry Classification
- SIC CODE: 6162 Mortgage Bankers and Loan Correspondents, 6163 Loan Brokers
- NAICS CODE: 522292 Real Estate Credit, 522390 Other Activities Related to Credit Intermediation, 522310 Mortgage and Nonmortgage Loan Brokers
- Suggested Workers Compensation Code(s): 8810 Clerical Office Employees NOC, 8742 Salespersons or Collectors – Outside
Mortgage Broker Insurance – The Bottom Line
Mortgage broker insurance is essential for a mortgage broker. It helps protect you and your clients from financial losses and other damages. You should always make sure that you have adequate coverage for your business and for any potential risks you may face. If you don’t, you could be liable for any damages or losses that occur. Make sure you understand your coverage, and if you have any questions, contact your insurance provider for guidance.