The most common way appraisers can limit their personal liability is through the purchase of “errors and omissions” (“E&O”) insurance.

Generally speaking, an E&O policy will cover a claim asserted by a lender where the appraiser fails to comply with the standard of care in rendering the opinion of value. Additionally, in states that allow claims directly by a property owner, an E&O policy typically insures those claims as well. The indemnity provision however, may create a hurdle where a property owner sues the bank and the bank, in turn, sues the appraiser. A common provision in E&O policies excludes claims arising out of a contract. A relatively common exclusion provides that the policy will not cover claims: [b]ased on or arising out of liability assumed by the named insured under any contract or agreement, unless such liability would have attached to the named insured even in the absence of such contract or agreement.