What is Errors & Omissions Insurance?
People who work in a professional capacity are expected to apply their expertise properly, and they might be held responsible should they fail to do so. Should a mistake lead to substantial financial loss or other harm to a third party, the professional who committed their error might be sued for damages and other expenses. Errors & omissions insurance policies help protect Massachusetts professionals from some for the financial consequences they could face if they ever made a major error while working.
Errors & omissions insurance is a form of professional liability insurance. Like other types of liability coverage, errors & omissions usually helps pay legal defense fees and settlements (up to a policy’s limits) in the event of a covered claim. Help with defense fee costs normally begins when a claim is filed, and typically is offered irrespective of the eventual outcome of a claim or lawsuit.
Who in Massachusetts Should Have E&O Insurance?
E&O insurance is a common form of professional liability insurance that’s used across an array of professions, most of which involve giving advice to clients. Some examples of professionals who might want this type of protection include:
- Lawyers and paralegals
- Financial and investment advisors
- Insurance brokers and agents
- Real estate brokers and agents
Even though this is a fairly common insurance, it’s still a specialized form of coverage as policies are typically adapted to suit the particular needs of professionals in a specific field. For example, policies designed for lawyers are often a bit different from those intended for insurance agents. Each will likely have its own terms, conditions, coverages and exclusions that are crafted with the respective line of work in mind.
Because policies tend to be specialized and adapted for specific fields, Massachusetts professionals should make sure they end up with a policy that’s appropriate for their work. An insurance agent who specializes in E&O insurance will be able to guide professionals toward policy options that are tailored to their needs.