Commercial title insurance: What you need to know
Commercial title insurance is a different product than a residential policy. For the most part, residential policies can be characterized as being “one size fits all” or “off the rack.” Yes, there are times when a residential policy may require an amendment or an exclusion to accommodate a particular situation, but often times, assuming the lawyer is using the document production software (e.g., LawyerDoneDeal’s RealtiWeb or Due Process’ the Conveyancer) the software will assist in identifying these concerns (assuming data has been correctly entered). The bottom line is that ordering a residential title insurance policy is a fairly straightforward process.
lf a residential policy is “off the rack,” a commercial policy is a tailored, custom-made article. Every situation is unique. The type and details of the transaction will dictate what is included or excluded from the final policy and its endorsements. Prudent lawyers will have their thinking caps on early and will evaluate the situation to determine the most commercially reasonable approach to each situation. Granted, tight deadlines can have an impact on the structure of the deal.
Commercial deals require tailoring and adjustments; for the most part commercial transactions are not compatible with the document production software to enable automatic ordering. This means being on your toes and understanding what needs to be done, when it needs to be done and what the policy does and does not cover. It will also require you to adjust your client acknowledgement form for title insurance – indicating that the client understands what is not covered. Once you add a lender into the fold, it can become a quagmire for the uninformed.
Click here to read the full article in LAWPRO Magazine by Tim Kennedy, General Counsel & C.O.O, Vice President Administration, MaxSys Staffing & Consulting