As a professional, when you offer your advice or opinion to a client, they expect for their situation to improve. However, sometimes, whether due to an error, negligence, or other cause, clients can suffer losses instead. When this happens, clients will often sue, putting your business in jeopardy. Errors and omissions insurance is a type of professional liability coverage designed to protect Massachusetts professionals from these types of lawsuits.
Professional liability insurance encompasses three main types of insurance: medical malpractice, directors and officers insurance, and errors and omissions insurance. Errors and negligence made in business are not covered by general liability insurance, necessitating this separate policy. Because any perceived error can trigger a costly lawsuit, even if you are ultimately found not at fault for the loss, insurance experts recommend that Massachusetts professionals in many industries have this important coverage.
A professional service is one in which you use your education, expertise, and experience to offer advice or opinions in exchange for compensation. This covers many fields in a variety of industries, including:
While conducting business in these and other fields, errors can be made or factors overlooked. As many as 15% of all professionals in MA will experience a negligence or error-related lawsuit at some point during their career. The associated costs can be crippling to your business, totaling tens of thousands of dollars, or more for serious losses. These costs can be devastating to your business.
Errors and omissions coverage is extremely variable, with carriers writing their own policies for various industries and situations. When purchasing coverage, you want to make sure it matches with the potential risks you face in your field. Your insurance agent can help find the right coverage for your business.
Coverage typically includes helping with costs of legal defenses, settlements, and judgements. It can cover you, as the business owner, your employees, and subcontractors.
Most policies are written as claims-made, meaning both the error and the lawsuit must occur within the active period of the policy. Some policies have retroactive dates, allowing lawsuits filed outside of the coverage period to be covered for a period of time after the policy expires. The longer this retroactive period, the more coverage you will have.
Even the best professionals can make errors in their work. When they do, clients can suffer losses, leading to lawsuits. Errors and omissions insurance can help protect your business from the associated expenses, so your Massachusetts business can continue to thrive despite your mistake.