Errors & Omissions Insurance in Massachusetts

What is Errors & Omissions Insurance?

Professionals are hired for their expertise in a certain field, and they’re generally expected to apply the expertise correctly. Should a professional fail to apply their expertise correctly, they may be held responsible and sued. Errors & omissions insurance may provide Massachusetts professionals with financial protection should they face a covered lawsuit arising from an error.

Errors & omissions insurance is a specific application of commercial liability insurance. It’s intended to help professionals in a variety of fields with legal costs and settlements associated with covered error-related claims. Like most liability insurances, E&O insurance usually pays for covered legal costs even before a lawsuit is settled.


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Who in Massachusetts Should Carry E&O Insurance?

Many professionals working in Massachusetts should consider carrying E&O insurance. While it’s not the only form of professional liability coverage, it’s a broadly useful one that any of the following professionals might want:

  • Legal professionals (e.g. attorneys, paralegals)
  • Financial professionals (e.g. investment advisors, financial planners)
  • Real estate professionals (e.g. real estate agents, brokers)
  • Insurance professionals (e.g. insurance agents, brokers)
  • Trustees (of almost any trust)

Other professionals who primarily give clients advice might also be interested in E&O insurance


What Kinds of Errors Does E&O Insurance Cover?

The precise errors that an E&O policy covers are dependent upon the policy’s terms, conditions and exclusions. Depending on a policy’s particular language, it might cover situations such as the following:

  • A real estate agent doesn’t note that a property is a historic landmark, and the client is unable to use the property as desired because of this designation
  • A paralegal misses an important deadline, and the outcome of a client’s case is jeopardized as a result
  • An investment advisor mis-executes a client’s trade, thus causing the client a substantial loss or missed gain
  • An accountant mis-transcribes a number, and their client faces significant tax penalties and interest because of the mistake

These varied examples show how flexible the protections that E&O policies provide can be. For a more specific explanation of how a policy might afford protection in a given field, professionals should talk with a knowledgeable insurance agent. An agent who’s well-versed in these policies will be able to explain coverages and how they could apply in different scenarios.

Should Medical Professionals Have E&O Policies?

Medical professionals don’t necessarily only provide advice, but they also actively provide treatment. While E&O policies normally do protect against advice-based risks well, these policies typically aren’t designed to protect against risks associated with an applied skill.

If a medical provider makes a mistake in the treatment they render, E&O is unlikely to cover a resulting claim or lawsuit. Medical malpractice policies are often underwritten to cover errors in treatment along with mistaken advice. For this reason, medical providers generally should get a medical malpractice policy rather than a standard E&O policy.


Do Professionals Receive E&O Coverage Through Their Employers?

Professionals who are traditional employees usually do receive E&O coverage through their employer’s policy, but there can be notable restrictions. Employer-provided coverage

  • Might not be as robust as employees would like
  • Might run out if multiple professionals use it in the same policy year
  • Probably doesn’t cover pro bono work or side work not done for the employer

Professionals who are independent contractors may or may not receive coverage from a hiring business, and any coverage that is provided could be limited in the aforementioned ways. Professionals in this situation can review their particulars with a knowledgeable insurance agent to determine how they can best obtain protection.


How Can Professionals in Massachusetts Get Errors & Omissions Insurance?

For help obtaining errors & omissions insurance in Massachusetts, contact the independent insurance agents at Keefe Insurance. Our agents have the expertise necessary to help you determine coverage needs, and we can recommend the best policy that meets those needs regardless of which insurance company offers it.