Due to the nature of the job, attorneys are particularly vulnerable to claims of negligence or failure to perform promised duties. Nationally, nearly 60,000 allegations of liability will be made against lawyers this year–and the numbers are only trending upward. As professionals in the business of giving advice and providing services to clients, lawyers require the protection of an errors and omissions (E&O) policy, also known as attorney professional liability insurance.
What Does E&O Cover?
E&O insurance is designed to protect an attorney, his staff and his firm from claims of negligence (errors) and failure to perform promised duties (omissions). Such protection is not included in a general liability policy.
An attorney professional liability insurance policy typically pays for legal defense, court costs and awarded damages, up to the limits of the specific plan. Fraudulent, malicious and criminal acts are not covered by E&O insurance.
Many clients, such as banks and other lending institutions, require that a firm carry a minimal amount of E&O coverage and will not engage an attorney’s services without proof of insurance. Most often, it is an honest administrative error that leads to claims of liability. Common areas of an attorney’s practice that are particular exposed to such risks include:
- Title agent or title agency services
- Notarization services
- Actions as a trustee or executor of estate
Attorney professional liability insurance is a no-brainer for any size law firm. Don’t risk the financial health of your practice, consult an experienced insurance agent today.