Errors and Omissions Insurance in Maine
Allen/Freeman/McDonnell Agency
Errors and Omissions Insurance
- What Is It?
- Who Needs It?
- Coverages Offered
Errors and omissions insurance is a specific type of liability coverage tailored for professionals who offer guidance and advice. It typically applies to professional oversight or negligence.
Professionals who charge for advice generally purchase E&O insurance. Primarily, Maine professionals who provide counsel, as opposed to those who execute a hands-on skill.
- A real estate agent fails to note that a property is uniquely zoned, and therefore can’t be used as their buyer intends.
- A paralegal missing a crucial filing deadline, weakening their client’s position in the eyes of a judge.
What is errors and omissions insurance?
Professionals who charge clients for advice face the ever-present risk of unwittingly making a mistake that costs their client. Should this ever happen, a professional might face a lawsuit. Errors and omissions insurance may help Maine professionals shield themselves from this potential eventuality.
Errors and omissions insurance is a specific type of liability coverage tailored for professionals who offer guidance and advice. It typically applies to professional oversight or negligence.
Which professionals in Maine should be carrying E&O insurance?
Professionals who charge for advice generally purchase E&O insurance. It’s primarily for Maine professionals who provide counsel, as opposed to those who execute a hands-on skill.
For example, professionals in the following fields often get this type of insurance:
- Legal field (e.g. attorneys, legal assistants, paralegals)
- Financial management (e.g. financial advisors, wealth managers)
- Tax preparation (e.g. accountants, tax preparers)
- Real estate (e.g. property managers, agents, brokers)
- Trust and estate (e.g. guardians, trustees, conservators)
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In select cases, contractors and tradespeople might also want E&O insurance. This is usually when they advise clients on projects.
Professionals unsure about whether E&O or a different professional liability insurance is right for them should take with a specialized insurance agent. An agent who knows E&O well will be able to determine if this is the right insurance to get, or assist with finding another type of professional liability.
What mistakes are covered by E&O insurance?
The exact mistakes that an E&O policy covers can vary, depending on both policy terms and field of work. A few examples of the sorts of mistakes a policy might cover are:
- A real estate agent fails to note that a property is uniquely zoned, and therefore can’t be used as their buyer intends.
- A paralegal missing a crucial filing deadline, weakening their client’s position in the eyes of a judge.
- A financial advisor mistypes a number during a transaction, costing the client a major loss due to the mistaken transaction.
- A tax advisor misses a major tax liability, later resulting in fines and interest to the client.
- A media consultant neglects to ensure a campaign’s legal compliance, causing reputational and financial losses for the client.
What does the term "claims made" mean in an E&O policy?
Many E&O policies, although not all, have “claims made” coverage. This typically indicates that the policy looks at the time a claim is made (among other factors) to determine coverage. The exact date that the error occurred is less important.
Claims made policies can provide superior coverage to other policies, and are especially useful when determining the date of an error would be difficult. The date of a mistyped transaction could be checked, but it’d be more difficult to determine exactly when a consultant neglected to check legalities.
Claims made policies often still have effective periods, however. When considering the effective period of a “claims made” policy, professionals should be attentive to:
- Retroactive Date: Generally marks the earliest possible date an error could have occurred for a claim to be covered by the policy. Usually applies even if the claim is made during the policy’s duration.
- Tail Coverage: Generally prolongs the window for lodging claims post the policy’s end date. Claims filed within this extension are typically covered.
For detailed insight into retroactive dates and tail coverage intricacies, professionals can speak with an insurance agent who knows E&O well.
How can Maine professionals secure errors and omissions insurance?
If you’re a professional in Maine in need of errors and omissions insurance, contact the independent insurance agents at Allen Freeman McDonnell Agency. We’re dedicated to helping you find a policy that’ll provide strong protection against the professional risks you face.
