Are you a financial advisor or CPA? If so, you are required to have insurance that covers errors or omissions (EO). It is a business expense that is vital for financial professionals, as one in seven will face a lawsuit at some point in their career.
If you’re in the market for EO insurance in New York, here’s some important information to consider. EO policies protect you from financial loss stemming from a lawsuit that’s based on an error or omission you made. Also known as liability coverage, it covers:
- Individual payouts: Most policies limit payouts per incident or claim, usually about $1 million.
- Aggregate payouts: Limits how much the policy will pay, usually $2 million, for multiple claims in the same year.
- Lifetime aggregate policy: Some companies limit payouts for the policy’s lifetime, instead of an annual aggregate amount. If this is the case with your EO insurance in New York, make sure the amount suits your needs.
No matter how meticulous you are, it’s likely you’ll make a mistake at some point in your career. If you carry general liability and think your policy will cover clients’ financial losses, think again. It only covers instances of physical injury that result from negligence. It is essential that you protect yourself with professional liability from an EO policy.