I don't think it is an unreasonable request. If they close a lot of high-dollar loans they would have a valid reason to want their abstractors to carry a sufficient amount of coverage for any potential claims.

I think this is fairly common in many businesses. I have a friend in the lawn care business and when he started doing a lot of commercial work, his customers required him to maintain a higher amount of liability coverage. For him, it was well worth it because those customers paid a much higher rate for his commercial services.

In our business, though, it may not be worth it to raise your coverage for one client, if they aren't paying higher fees than the standard in the industry. As you pointed out, the amount of work you are doing doesn't justify the expense. While I don't think it is "ridiculous" that they would have such requirements, I agree that it may not make sense for you to do it. I would just let them know that the revenue you earn from their work isn't enough to justify the increase in premium and you won't be able to accommodate their request. Then, its up to them to decide what they want to do.

Best,
Robert A. Franco
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