Errors with E&O – Part 1 – KMRD


During the otherwise error free month of June we will review how professional liability insurance, also known as E&O, can help three fictitious firms be ready for one minute from normal. Let’s begin with the question: How do you know if your firm needs professional liability insurance?

Traditionally, “learned professions” including legal, medical, engineering, accounting and financial services firms were regarded as professional services firms. According to a number of courts, though, this term has recently been broadened to describe a wider and more diverse group including firms providing physical or manual services. These can include plumbers, roofers, exterminators, locksmiths, handymen and home inspectors. As a result, professional services exclusions in Commercial General Liability policies are now meaningful to a much wider range of firms.

Here is a rule of thumb that can come in handy: If your firm operates in a state in which it is regulated and licensed, it is likely to be vulnerable to a professional services exclusion. However, the absence of regulation or licensing does not automatically mean your firm will be exempted from an exclusion. Owing to this confusion, we recommend seeking the guidance of an insurance professional.

To learn more about your own firm’s professional liability risk, and to discuss how E&O insurance can help protect it one minute from normal, please contact your relationship manager at KMRD Partners. He can provide advice regarding your firm’s situation regarding this critical issue.

Next Post in this Series: Errors with E&O Part 2

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