Do you have the best E&O insurance policy for your law firm or title agency?
Errors and omissions (E&O) insurance is a necessity for every attorney and title agent. It’s a prudent and practical way to ensure your firm or agency is protected from financial losses in case you make an error or are accused of poor professional practices such as negligence or misinterpretation.
It offers you a lifeline that could mean the difference between facing financial ruin and keeping your practice operating. Unfortunately, insurance is a set and forget thing for many policy holders. That is foolhardy.
Because your firm or agency will change over time, it’s incredibly important to review your E&O insurance policy periodically to make sure that you have enough coverage to manage your risks and that you’re not paying for insurance that you don’t need. To avoid nasty surprises in the event of a claim, here are the most important things to consider when reviewing your E&O insurance policy.
You’ve Expanded Your Professional Services
Have you changed the type of services your offer? Is your firm or agency expanding into a new service area? Your insurance needs depend upon the services you offer. If there are any changes to those offerings, either in nature or scope, you’ll want to make sure your E&O insurance is up to the job.
Typically, with new initiatives and changes come new and/or increased challenges. Make sure you have the right type and level of coverage to keep your firm or agency protected from any liability issues. E&O insurance can be and should be customized to your unique needs.
You Have New Exposures
Law firms and title agencies are increasingly adding software as part of the services they offer, which exposes them to tech E&O or cyber E&O. With the growing need for an online presence, producing content to enhance brand reputation and increase website traffic has turned almost every firm into a publisher, which opens them up to media E&O.
If you’ve made significant changes to your offerings, your E&O insurance policy should keep pace to avoid compensation shortfall. But if your insurance carrier doesn’t cover the new aspect of your firm or agency, it’s time to go shopping because the gap in coverage can create problems that are potentially costly.
Your Firm or Agency Has Grown or Reduced in Size Dramatically
Whenever you change in size or revenue, you should review your E&O insurance policy. The size of your firm or agency and the value of the cases or projects you take on can play a major role in determining your errors and omission insurance needs and costs.
For instance, if your firm or agency greatly increased its revenue or valuation, the insurance you began with may not match the needs of your business at its current state. This means you could have insufficient coverage, which increases risks and costs.
If your firm or agency significantly shrank, you could be paying more in premiums than what you really need. Taking some time to review your E&O insurance policy will help ensure you’re paying the right amount of money for the right amount of coverage for your law firm or title agency.
Consider the Details of Your E&O Insurance Policy
When it comes to E&O insurance coverage, the devil is often in the details. The wording of the policy spells out the scope of coverage, policy limits, premium, exclusions, and other important information. Some insurance providers may offer less expensive premiums but with reduced policy limits or scope of coverage. A thorough review of all the provisions in your insurance policy can help determine if the policy meets your needs.
Type of Coverage
E&O insurance policies can be “claims-made” or “occurrence.” A claims-made policy covers claims that occur and are reported during the period in which the policy is in effect. Coverage expires once the policy expires. You’ll need tail insurance (separately purchased) to make sure you have full protection for a set amount of time after a policy ends.
Occurrence professional liability insurance provides coverage for incidents that occurred during the period of coverage, regardless of when a claim is filed or reported to the insurance company. Keep in mind that most errors and omissions insurance policies are claims-made.
Litigation and Consent to Settle
Be sure to check if your E&O insurance policy contains a clause specifying whether or not a claim can be settled without your consent. If your policy does not have a “consent-to-settle” clause, the insurance company can settle a case even if you’ve been falsely accused. If the policy gives you this right, the E&O insurer must consult you before making any offers.
This is something you want in an insurance policy because refusal to consent to the insurer’s settlement recommendation may leave you with the responsibility of ongoing defense costs and any judgments that exceed the settlement offer.
Coverage and Exclusions
E&O insurance provides coverage for undelivered services, professional errors and oversights, missed deadlines, misinterpretation, and accusations of negligence. Some policies provide additional coverages, such as personal and advertising injury, unlimited defense costs, and supplementary payments. Most policies exclude intentional misconduct, punitive damages, bodily injury, and property damage.
Your policy specifies what incidents are covered. You want to make sure your insurance covers your full scope of professional services.
Let Us Help Reevaluate Your Coverage Needs
Having the right E&O insurance protects your law firm or title agency you’ve worked so hard to build. Reviewing your policy annually or after any major business changes is a good way to eliminate over insurance and unnecessary costs and to ensure your firm or agency is leaving nothing to chance.
At Attorneys First Insurance, we are committed to providing what is best for you. We only serve attorneys and title agents and because of this exclusive focus, our policies and coverage match your exact coverage requirement without any extra expense or underinsurance. We offer better terms and coverage at significantly lower rates than other providers. As your firm or agency evolves, we’ll help you make the necessary adjustments to save you time and money.