I have mixed opinions on these types of disclaimers.  First, I am not sure they will hold up in all situations or in all jurisdictions. 

Second, I haven't yet decided for myself if it is entirely ethical to attempt to disclaim professional liability.  A part of our job is to provide reliable information.  If we fail to do so, and our customer incurs a financial loss, shouldn't we be responsible for it?

On the other hand - I don't feel the fees in our field compensate us for the amount of liability we incur.  I find it shocking that an abstractor would be expected to be held liable for hundreds of thousands of dollars in potential liability for a $45 fee.

Although title insurance covers against loss from other causes, it has been reported that most of the claims are for searching error.  To me this indicates that the liability for searching error should be worth more than half of the title insurance premium.  This theory seems to be supported by the agency agreements that most title agents have with their underwriters.  Those agreements hold the agent responsible for searching error and a typical split of the premium gives 70% to 85% to the agent.

The problem is that many agents are passing the liability along to their abstractors by requiring them to carry E&O insurance, but they aren't providing any additional compensation.  This is what makes it so profitable to outsource title work to independent abstractors.

While I believe that there are many cases where the underwriter does not attempt to collect a loss from an agent, and likewise, many agents do not attempt to collect losses from their abstractors - I believe it is becoming more common to do so.

E&O insurers are encouraging agents to make sure that their abstractors carry E&O insurance for just this reason.  The fact that it is possible to collect hundreds of thousands of dollars from the abstractor in return for a search fee of $45 is frightening.

So, I am not sure how I feel about disclaimers.  I have a feeling that clients would not like to see these disclaimers and I think it could affect business.  From the case in PA, PA Court Upholds Liability Limitation in Title Abstract, it is clear that the advice to agents is to object to them.  However, the potential loss from a claim certainly makes it an appealing option for the abstractors.

Personally, I do not use disclaimers on our searches, however, the thought has crossed my mind.  I think we should either be able to charge appropriately for the liability we incur or we should not be expected to incur the liability. 

Best,
Robert A. Franco
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