- March 24, 2000
- All Issuing Offices in Alabama, Alaska, Arkansas, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Virginia, Vermont, Washington, West Virginia, Wisconsin, Wyoming.
- Commitment Disclosure
There have been recent lawsuits claiming that a title insurer or title insurance agent may be liable in tort to a third party (such as a seller) or for additional damages, because of a separate duty to: (1) examine title; (2) disclose all matters affecting title, even those that may otherwise be insured against; and, (3) not misrepresent the status of title.
Some states allow these suits and some do not. Courts sometimes focus on whether the title company advertised that it examines title for the customer. Some courts suggest that this type of advertisement may create a new duty to parties to do a correct, complete examination. While we do not believe that this position is correct, it must be considered. As a title insurance agent, you perform or secure an examination for our benefit to determine insurability and do not examine title for the benefit of proposed insureds or other parties.
Company Policy: You should not advertise that you are examining title for the customer's benefit in producing a commitment, title policy or other title insurance form.
Add a disclaimer to its commitment (or preliminary report or binder). Some courts will enforce a disclaimer for negligence.
Company Policy: We recommend that you included the following disclaimer in your title commitment (preliminary report or binder).
THIS COMMITMENT (substitute preliminary report or binder where appropriate) IS NOT AN ABSTRACT, EXAMINATION, REPORT, OR REPRESENTATION OF FACT OR TITLE AND DOES NOT CREATE AND SHALL NOT BE THE BASIS OF ANY CLAIM FOR NEGLIGENCE, NEGLIGENT MISREPRESENTATION OR OTHER TORT CLAIM OR ACTION. THE SOLE LIABILITY OF COMPANY AND ITS TITLE INSURANCE AGENT SHALL ARISE UNDER AND BE GOVERNED BY THE CONDITIONS OF THE COMMITMENT. (Examples are available through the references section at the end of this bulletin.)
If you should have any questions, please call Stewart Title Guaranty Company underwriting personnel.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.