For most attorneys, taking out an Errors & Omissions for Lawyers liability policy is a given. Despite this, professionals who are new to buying liability insurance may have mistaken beliefs about the nature of these policies and their coverage. Anyone preparing to buy a policy should be sure to avoid the following misunderstandings when choosing between different options.
1. The Policy Only Covers Settlement Costs
Errors & Omissions for Lawyers can offset numerous costs associated with E&O claims, such as legal fees and court costs. Many insurers also offer complementary policies to protect against secondary consequences of a claim, such as work time lost. A policy that only offsets settlement costs may not offer enough coverage.
2. The Policy Covers Intentional Actions
Though this insurance covers omissions, they must be accidental. By this definition, omissions include insufficient research, inadequate disclosure, and other unintentional failures in performing the service promised. Intentional omissions and outright fraud are not covered under E&O policies.
3. Having E&O Coverage Is a Luxury
Most attorneys help clients deal with emotionally charged issues that have high financial stakes. Everyone makes mistakes, but when a professional offering a valuable service makes an error, there can be serious repercussions. With all the deadlines, research, and paperwork attorneys must deal with, not to mention the crucial advice they dispense, protection against the occasional error is crucial.
Understanding Leads to Better Protection
Understanding E&O policies can take a little work, but the effort is more than worthwhile. Professionals who have their facts straight when they shop for a policy will be much more likely to find one offering adequate coverage for a fair price.