Error and Omission insurance is very expensive. So, if your state does not require it, why get it? It’s simple really—you can’t afford not to. No matter how careful you are or how many times you double check—mistakes are inevitable in every industry. It is human nature. But if you are making decisions that affect other people, high stakes liability can quickly escalate. Suddenly you’re being sued for simple errors that had huge consequences.

Errors and omissions insurance protects you against malpractice claims that could result in bankruptcy. Without it, you could be responsible for enormous fines. Usually insurance will cover monetary damages that you may have caused due to your professional negligence. However, more often than not it will not cover personal injury.

Some errors that E&O insurance will likely cover:

-Imperfect review of title
-Imperfect documentation
-Breach of contract
-Searching the wrong parcel
-Failure to find all necessary information like deeds, liens, and/or will

There are some things you should consider about your selected insurance before you assume you have coverage.

There are many different plans available for errors and omissions insurance. And it could make the difference between financial ruin and financial security. One thing you should consider is whether to insure just yourself or the whole organization. Insuring yourself may be appropriate if you are the only one handling accounts. However, if your organization has an assembly line of work or if multiple people are working on the same account—organizational insurance may be best. That way if there was malpractice, whole organization insurance would be more capable of covering all the associated costs.

Most likely your agency insurance will have enough coverage. However in small firms or financially strained agencies, it may be best to review the insurance policy closely. If you feel that you may not be adequately covered, it may be in your best interest to invest in additional coverage.

Of course insurance payments vary by coverage plans. It is important that your coverage match the potential damages associated with your accounts. If your accounts are large and could have potential damages of upwards of a million dollars, your insurance should reflect that! Insurance is only valuable to the point that it can help you. If you are responsible for a $2 million dollar law suit and only have a $1 million dollar policy, it doesn’t seem completely advantageous.

You should also check when your insurance expires. It’s obvious that if it expires, you should renew it. However if you have both underlying and umbrella insurance, make sure these policies expire on the same date. Having different expiration dates can result in coverage gaps. The importance of errors and omission insurance cannot be overstated!