Samantha, I think you might be panicking here for nothing.  And Robert, PLEASE comment on my thoughts/stand on this sort of thing.  Being a vendor manager with more than 40 abstractors working under my banner, I must get a threat of a claim 2 or 3 times a year.  Usually, one of them goes into the "serious" category.  When that has happened to me and I get an INFORMAL demand to contact my insurance, I calmly and politely explain that I won't do that until I have the facts of the case and try to resolve it on my own.  Since I have a $5,000 deductible anyway, any tax problem (and that's common here in Michigan -- mis-quoting taxes) can be cleared up by the abstractor coughing up the dough (if there truly was a mistake) and that's the end of it.  We even kept a client where that happened!  Mistakes happen, and when you do hundreds of orders a month, it happens a few times a year.

With missed mortgages, I find out why it was missed.  99 times out of 100, the client is saying we missed a mortgage when, in fact, the mortgage was misindexed, never recorded in the correct county, or has a totally different legal description.  It ends right there.  in the 1 out of 100 times, I press the client to explain why THEIR client (the borrower) didn't disclose the mortgage when they have to sign paperwork to that affect.  I put the blame where it belongs:  on the borrower.  So far, this has worked.  I have enough disclaimers on my write-up forms to help protect me.  Eventually, I'll get hit.  It's a numbers game.  But until then, I'll fight tooth and nail NOT to put in a formal claim, especially when it may be that the "claim" goes absolutely nowhere.

As for being a corporation, I don't see how they can touch your personal assets.  I know there is some wording about "gross negligence" but it has to be proven and when it is our word against the Register of Deeds, I don't see how any miss can actually BE proven.  Robert, what's your take on being protected as an LLC or a corporation?