Professionals, simply by doing their work, are exposed to potential risk. Should they make a mistake, they might be sued for any financial damage that the mistake causes. They can be sued, and possibly have to pay legal fees, even if they don’t make an error. Errors and omissions insurance helps Massachusetts professionals protect themselves from covered lawsuits that claim they made an error or omission in their work.
Errors and omissions coverage is a form of liability insurance that’s primarily designed for professionals who give clients advice. Should a professional provide bad advice that causes a client to lose money, the client may seek reparations for their loss. An errors and omissions policy may cover any legal fees or settlement associated with a lawsuit filed by a client who suffered a financial loss because of a professional’s bad advice.
Professionals in Massachusetts who primarily offer advice ought to consider getting errors and omissions insurance. Some professionals who may want a policy include:
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.
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:
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.
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.