Error Insurance Policies Error insurance goes by a number of different names and product descriptions in the insurance industry. Much of this has resulted over time by the fact that insurance products are described and created by their providers, and not so much a standardized third party such as government. Typical error insurance names include: • Error & Omissions and many variations of that name • E&O insurance and similar acronyms • Professional coverage • Malpractice insurance • Professional liability insurance or coverage • Malpractice policies Coverage Benefits Clearly, the most important benefit from an error insurance policy is financial assistance with defense attorney's fees and court costs, including damage awards. The award is probably the most critical coverage component since, as mentioned before, many professional liability awards can be for large sums of money. Even if a case doesn't win, the defense alone can be expensive. Absent error insurance, a business can be wiped out just in attorney bills proving innocence. So a business gets punished regardless which is why many complain about the need for tort reform nationally. That said, until such changes occur, error insurance helps keep a business solvent rather than going bankrupt due to legal bills. Critical Claim Components and Caps Error insurance, if providing legal defense support, can provide the means to fend off a lawsuit quickly, but not always. A professional liability lawsuit has to meet a certain threshold it needs to pass to win. First off, the claimant needs to show that a professional business was negligent in its practice. That's a bit hard to do. It takes another expert in the same business to point out what the first expert forgot to do and convince a jury that's the case. Unfortunately, by the time such a determination is made, a lot of lawyer hours have gone into the process. Next, not all mistakes are covered, even if you have error insurance. Intentional mistakes or activities that turn out to be convicted of fraud will null and void any error insurance policy. The covered party will then be on their own for legal costs and any punitive damages, including a likely lawsuit from the insurer for expenses already incurred. Many error insurance policies are also capped on how much they will cover. This typically includes the procedural court costs and damages into one lump sum total allowed. If the costs exceed this level, the business could still find itself out in the cold if the policy is not big enough. Policies and Benefits