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ALTA/ACSM Land Title Surveys: Optional Table A item 21 – Professional Liability Insurance

by Gary on October 31, 2014

Table A, item 21 of the 2011 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys allows the client to assure that the surveyor conducting the ALTA/ACSM Land Title survey has professional liability (errors and omissions) insurance at a specified level.

Although in my travels, I have heard it said that professional surveyors really do not incur much in the way of liability when conducting a land title survey, I have personally been an expert witness in two cases that involved claims of a million dollars or more related to a land title survey.

Despite popular belief, many surveyors do not carry professional liability insurance.  This is problematic from several different perspectives.  First of all, clients, title companies and lenders regularly place their faith in surveyors who they expect do a competent and professional job.  If something goes awry in the process of preparing a survey and a claim results, those who rely on the survey should have every expectation that they will, at a minimum, be able to recover the value of the damages that resulted.  But if it turns out that the surveyor did not have professional liability coverage, the ability of the claimant to recoup a fair settlement will likely be limited, especially if the claim is a big one.

Another consideration is that companies that carry errors and omissions insurance have a variety of resources at their fingertips available from their insurance agent and carrier that can help them improve their practice and procedures.  This should lessen the chance that they will make a mistake resulting in a claim in the first place.

I have received a number of questions from attorneys asking about the appropriate amount of coverage and term of insurance that they should require of a surveyor. The answers to such questions are logically a function of such considerations as the value of the real estate, the size and complexity of the property, the amount of development on the property, the potential economic effect of an error, and the statutes of repose and limitations that relate to the professional services contracted.  Those considerations will need to be balanced against the amount of coverage that a survey company will logically and typically carry.

It is highly recommended that clients ask their surveyors if they carry professional liability insurance and check Table A item 21 to require it.  Doing so will provide the client, and his or her lender and title company with peace of mind that there will be coverage in the event of an error or omission on the part of their surveyor.