We recently created a procedure for our approved appraisers. When writing the procedure, we listed certain documents that we would require from the appraiser. One appraiser doesn't have E&O insurance. Has anyone else come across this? The appraiser says he has decided to opt out of buying the E&O coverage. I am thinking we should document why we allow them to be an approved appraiser and maybe some type of risk assessment to determine what risk this puts on the bank.

It's a risk tolerance for you and your management. My shop requires E&O coverage or will not engage the appraiser.

Some states require an E&O prior to certifying or licensing an appraiser.

The appraiser says he has decided to opt out of buying the E&O coverage.

I could easily do that in my line of business also and my clients could and probably would also send me packing. It is not his call if he wants work from you, it is yours.

Thank you for the responses. We have decided to not use him if he won't buy the E&O coverage.