Commitments and Contingencies

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Obligations under Guarantees

Under the terms of CUW Solutions' contract underwriting agreements with lenders and subject to contractual limitations on liability, we agree to indemnify certain lenders against losses incurred in the event that we make an error in determining whether loans processed meet specified underwriting criteria, to the extent that such error materially restricts or impairs the salability of such loan, results in a material reduction in the value of such loan or results in the lender repurchasing the loan. The indemnification may be in the form of monetary or other remedies. For each of the years ended December 31, 2024 and 2023, we paid less than $0.1 million related to remedies. As of December 31, 2024, management believes any potential claims for indemnification related to contract underwriting services through December 31, 2024 are not material to our consolidated financial position or results of operations.

In addition to the indemnifications discussed above, in the normal course of business, we enter into agreements or other relationships with third parties pursuant to which we may be obligated under specified circumstances to indemnify the counterparties with respect to certain matters. Our contractual indemnification obligations typically arise in the context of agreements entered into by us to, among other things, purchase or sell services, finance our business and business transactions, lease real property and license intellectual property. The agreements we enter into in the normal course of business generally require us to pay certain amounts to the other party associated with claims or losses if they result from our breach of the agreement, including the inaccuracy of representations or warranties. The agreements we enter into may also contain other indemnification provisions that obligate us to pay amounts upon the occurrence of certain events, such as the negligence or willful misconduct of our employees, infringement of third-party intellectual property rights or claims that performance of the agreement constitutes a violation of law. Generally, payment by us under an indemnification provision is conditioned upon the other party making a claim, and typically we can challenge the other party's claims. Further, our indemnification obligations may be limited in time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us under an indemnification agreement or obligation. As of December 31, 2024, contingencies triggering material indemnification obligations or payments have not occurred historically and are not expected to occur. The nature of the indemnification provisions in the various types of agreements and relationships described above are believed to be low risk and pervasive, and we consider them to have a remote risk of loss or payment. We have not recorded any provisions on the consolidated balance sheets related to these indemnifications.

Commitments

We lease office space for use in our operations under leases accounted for as operating leases. These leases generally include options to extend them for periods of up to fifteen years. Our option to extend the term of our primary office locations at the greater of existing or prevailing market rates was not recognized in our right-of-use asset and lease liability. When establishing the value of our right-of-use asset and lease liability, we determine the discount rate for the underlying leases using the prevailing market interest rate for a borrowing of the same duration of the lease plus the risk premium inherent in the borrowings under our Credit Facility. Operating lease right-of-use assets of $30.0 million and $32.2 million as of December 31, 2024 and 2023, respectively, are reported on our consolidated balance sheet as property and equipment. Operating lease liabilities of $36.2 million and $38.0 million as of December 31, 2024 and 2023, respectively, are reported on our consolidated balance sheet as other accrued liabilities. Total rent expense was $5.9 million, $5.1 million and $3.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The following table presents lease cost and other lease information as of and for the years ended December 31:


	Year Ended December 31,
($ in thousands)	2024			2023			2022
Lease cost:
Operating lease cost	$	5,918		$	5,138		$	3,908
Short-term lease cost	207			128			—
Sublease income	(213)			(142)			(138)
Total lease cost	$	5,912		$	5,124		$	3,770
Other information:
Weighted average remaining lease term - operating leases	9.4 years			10.6 years			6.9 years
Weighted average discount rate - operating leases	4.6		%	4.5		%	3.6		%

The following table presents a maturity analysis of our lease liabilities as follows at December 31, 2024:


Year Ended December 31 (In thousands)
2025	$	5,853
2026	4,698
2027	4,621
2028	4,407
2029	4,320
2030 and thereafter	21,306
Total lease payments to be paid	45,205
Less: Future interest expense	(9,032)
Present value of lease liabilities	$	36,173

The maturity analysis of our lease liabilities shown above have not been reduced by minimum sublease rental income of $0.2 million due in 2025 under the non-cancelable sublease.

Contingencies

Our title operations may occasionally be named as a defendant in claims concerning alleged errors or omissions pertaining to the issuance of title policies or the performance of escrow services. The Company assesses pending and threatened claims to determine whether losses are probable and reasonably estimable in accordance with ASC 450, Contingencies. The Company maintains a reserve for potential losses related to title research and the related title policies sold by the Company as the agent. This reserve is subjective and is based on known claims and claims incurred but not yet reported to the Company. The Company monitors the claims reserve for adequacy on a quarterly basis. As of December 31, 2024 the Company had recorded a claims reserve on the Consolidated Balance Sheet of $3.2 million, which is included in other accrued liabilities.