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What Is Errors and Omissions Insurance?
Professionals are hired for their expertise, and they’re expected to apply that expertise properly. Should a professional make an error when offering advice or helping a client, they might be held financially liable for any negative consequences that follow. Errors and omissions insurance policies help protect professionals in Massachusetts from the liability risks that accompany work-related errors.
Errors and omissions insurance is a specialized form of commercial liability insurance that’s uniquely designed to meet the risk mitigation needs of professionals. Being a liability insurance, the coverage usually helps pay legal costs, settlements and judgements that are associated with covered lawsuits and claims. In most cases, policies will begin covering legal costs as soon as a claim is filed and before it’s finally settled.
What Kinds of Incidents May E&O Insurance Policies Cover?
E&O insurance policies come with a range of coverages that may provide protection in many different situations. The following are just some of the situations where an E&O policy with the right coverages in place might offer protection:
• A real estate agent fails to mention how a property was zoned, and their client can’t use the property for their intended use after purchasing it
• A paralegal fails to file essential paperwork on time, and the error leads to a negative outcome in the client’s case
• An investment advisor fails to execute a trade per an agreed-upon timeline, and their client’s portfolio decreases in value
• An accountant misreads a decimal point while preparing taxes, and their client is assessed penalties and fees
• An electrician recommends the wrong gauge wire for a project, and the mistake leads to a fire that causes damage
What Professionals in Massachusetts Need E&O Insurance Policies?
E&O insurance is primarily used by Massachusetts professionals who offer advice, and most professionals who offer advice should have this coverage in place. A few examples of professionals who would likely benefit from having coverage include:
• Attorneys and paralegals
• Investment advisors and insurance agents
• Real estate agents and brokers
• Appraisers and trustees
• Tradespeople who advise clients on projects
Some professionals dispense advice but also apply learned skills. These professionals usually need a different form of professional liability insurance that’s more suitable to their work than an E&O policy. For example, doctors typically have to purchase medical malpractice insurance rather than a standard E&O policy.
Anyone who is unsure whether they need E&O insurance should speak with a knowledgeable agent who specializes in this type of coverage. A specialized agent will have worked with many professionals, and they’ll have the expertise necessary to identify the most appropriate form of liability coverage. They’ll know whether an E&O policy or other policy makes the most sense.
How Much Do Errors and Omissions Policies Cost?
Errors and omissions policies’ premiums are based on many factors, so exact rates for coverage frequently vary. Where a business is located, the scope of work a professional does and any past claims history are just a sampling of what might influence a policy’s rates.
An independent insurance agent can help professionals find out how much insurers would charge for a policy that meets their needs. Independent agents can explore policy options from multiple insurance companies and show clients the most attractive options among the available offerings.
How Can Professionals in Massachusetts Get Errors and Omissions Insurance?
For help finding errors and omissions insurance, contact the independent insurance agents at John P. Russell Insurance, Our team has assisted many professionals in Massachusetts with their coverage needs, and we’re here to help you too.
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