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Error Omissions
Error Omissions

A Close Look at Errors and Omissions Insurance


E&O Insurance Essential Coverage for ProfessionalsE&O Insurance Essential Coverage for Professionals

Errors and Omissions (E&O) insurance, also known as Professional Liability and Malpractice insurance, is must-have protection for appraisers, architects and engineers, attorneys, insurance agents, physicians and other medical professionals, mortgage brokers and real estate agents, technology consultants, and many others. Additionally, there are also quite a number of businesses that have E&O exposures, including advertising agencies, PR firms, market research companies, web hosting companies, staffing agencies, among others.

A professional is defined as an individual who has specialized knowledge and skill that allows him or her to provide a professional service, and who is subject to the legal, ethical and/or technical requirements of a given profession. In order to practice their profession, they are required to earn specialized degrees (and are usually licensed and/or certified) and comply with relevant regulations. They are held to a certain standard of care as it relates to their respective profession.

There are no standard Errors and Omissions policies so it’s vital that a professional works with an expert that specializes in this area. Generally speaking, E&O insurance provides professionals for damage amounts for which they may be held responsible (up to the policy limits) as a result of rendering or failing to render their professional services. Coverage applies to the professional, his or her partners and employees, and the professional’s corporation or partnership. Most policies are written on a claims-made basis, which means the claim must be made during the policy period. Policies are often written to provide for indemnity (damages) and expenses, including defense costs and outside experts.

Typical E&O claims vary depending on the profession. For example, for lawyers you will see claims involving: failure to file within statute of limitation, failure to timely file an answer, poor advice, conflict of interest, and failure to follow the client’s instructions. For accountants, typical claims include: errors in financial statements, audit errors, negligent tax filings or tax preparation, and poor management advisory services. For architects and engineers, claims can arise from: cost and time overruns, negligent design or preparation of plans, failure to meet code, improper selection of materials, and structural failure.

There are certain exclusions in Errors and Omissions insurance policies. These include: criminal, fraudulent, deliberately wrongful, or malicious acts; bodily injury and property damage (except for certain medical and design professionals); guarantees or warrantees; liability for workers compensation, fiduciary liability under ERISA, punitive damages; among others.

Our professionals at Axis Insurance Services specialize in Errors & Omissions insurance and can tailor a specific policy to address your professional work and exposures. We would be happy to discuss your needs and how we can provide an insurance program to respond to the risks you face. Call us at (877) 787-5258.

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Blogged on: July 3, 2014 by Mike Smith
Error Omissions
Error Omissions
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Error Omissions
Error Omissions