Errors and Omissions Insurance in Texas

What is errors and omissions insurance? 

In the professional world, charging for advice comes with some risks. A professional might be held financially responsible by a client if they ever give wrong advice, and there are plenty of ways to make mistakes when advising. To help better protect against this risk, professionals in Texas can get errors and omissions insurance.

Errors and omissions insurance generally offers professional liability coverage for those who give advice. Policies normally cover a number of errors that could result in bad advice.

Which professionals in Texas need E&O insurance? 

If you’re a professional in Texas charging clients for your advice, you should probably consider E&O insurance. Most professionals who primarily give advice should have coverage. For example, these policies are often purchased by professionals in the following fields:

• Legal (e.g. lawyers, paralegals and legal secretaries)
• Financial (e.g. financial advisors and wealth asset managers)
• Taxation (e.g. certified public accountants and tax preparers)
• Real estate (e.g. agents, brokers and property managers)
• Trusts (e.g. conservators, guardians and trustees)

Sometimes contractors too should consider the protections that E&O policies can provide. If contractors give advice to customers, this coverage might help protect against incorrect recommendations. Even landscapers may want a policy if they’re discussing how to landscape properties with their customers.

What sorts of scenarios does E&O insurance cover?

The specific protections that E&O insurance provides vary, depending on a professional’s field and a policy’s terms. The right policies might offer coverage in situations like these:

• A real estate agent neglects to check a property’s zoning, and this prevents the buyer from using the property as intended.
• A paralegal misses an important deadline, which may compromise their client’s case in the courtroom.
• A financial advisor clicks “buy” instead of “sell” when executing a trade, and the mistake costs their client a substantial sum.
• A tax professional overlooks key liabilities, leading to fines and interest that their client must pay.
• A media and marketing consultant doesn’t check whether their campaign meets legal compliance requirements, and the client is fined or sued as a result

What does “claims made” mean in an E&O policy?

Many E&O policies provide “claims made” coverage, which addresses whether a claim is covered with regard to timing. Claims made generally means that a claim can be covered if it’s filed within the insurance policy’s window, even if the actual error occurred outside of the policy’s effective period.

Claims made policies can provide more coverage than other types of policies, and claims made is especially helpful if the exact date or a mistake is uncertain. There are a couple of limitations to claims made coverage that professionals should be aware of, however:

• Retroactive Date: This usually denotes the earliest date that an error could have occurred, for the claim to be covered. Errors occurring before the retroactive date are unlikely to be covered, even if filed when coverage is in effect.
• Tail Coverage: This usually extends the time frame to file claims after the policy concludes. Claims filed during the tail coverage period are typically eligible to be covered.

An insurance agent specializing in E&O insurance can go over all of the factors that can affect coverage in more detail.

How can Texas professionals get errors and omissions insurance? 

If you’re a Texas professional seeking errors and omissions insurance, get in touch with the independent insurance agents at Steve White Insurance. We’ve helped many professionals find the professional liability coverage they need, and we’ll make sure you find an E&O policy that’ll protect you well.