What Massachusetts Professionals Need Errors and Omissions Insurance?
Professionals in Massachusetts who primarily offer advice ought to consider getting errors and omissions insurance. Some professionals who may want a policy include:
- Lawyers
- Real estate brokers and agents
- Investment advisors and stock brokers
- Financial planners and insurance agents
- Trustees
- Appraisers
Professionals who have a skill that they apply, such as doctors who practice medicine, tradespeople who work in construction, and estheticians who perform beautification procedures, often also need professional liability insurance. A malpractice policy, however, might better protect professionals whose work isn’t limited to giving advice.
What Kinds of Claims Will an Errors and Omissions Policy Cover?
Exactly what kinds of claims a particular errors and omissions policy will cover depends on the policy’s particular terms, conditions, and exclusions. The field of the insured professional will also affect what kinds of claims they may face and what their policy might need to cover. The following are just a few examples of different scenarios that professionals might face and a policy may cover:
- A lawyer writes down an incorrect filing date for a case and, as a result, the deadline is missed and the client’s case is lost
- A real estate agent fails to give a client all of the information that’s available on a Worcester, MA property, and the client learns at a later time that the property’s zoning doesn’t permit their intended use
- A stock broker fails to quickly execute a client’s order, which results in the client suffering a significant loss
- An accountant incorrectly transposes a figure when calculating a client’s taxes, and the client is later assessed penalties and interest by the IRS
What Are Claims Made Policies?
Errors and omissions coverage is typically written as a “claims made” policy. These types of policies typically cover claims based on when they’re made, rather than when the incident occurred. Thus, a policy may cover an incident that occurred before the policy was in effect.
Claims made policies don’t cover incidents regardless of when they occur, though. In most cases, policies have retroactive dates and discover periods. Retroactive dates typically determine the earliest date that the policy will cover incidents for, and incidents before this date usually aren’t covered. Discovery periods determine how long after a policy’s effective period it will cover claims that occurred during the policy’s period for.
How Can Massachusetts Professionals Get Errors and Omissions Insurance?
Understanding how retroactive dates, discovery periods, and other technical aspects impact an errors and omissions insurance policy’s coverage can be complicated, and a mistake could result in a claim not being covered. Therefore, professionals should seek the help of an experienced, independent insurance agent when looking for an errors and omissions policy. An agent who’s helped other Massachusetts professionals will be well qualified to assist another professional who needs coverage.
