Most professionals know they need insurance, but many don’t realize their general liability coverage has significant gaps when it comes to professional services. In this episode of Absolute Trust Talk, host Kirsten Howe continues her conversation with Dean Myers, owner of Core Insurance Agency, to explore errors and omissions insurance—specialized coverage designed specifically for professional liability risks. Discover which professions beyond doctors and lawyers should consider E&O coverage, including architects, engineers, accountants, and contractors who incorporate design elements into their work. Learn what actually drives malpractice claims (hint: it’s often administrative issues rather than technical errors), how premium costs vary between specialties, and what “tail coverage” means for your long-term protection. Whether you’re evaluating your current coverage or exploring professional insurance for the first time, this conversation offers practical insights to help you understand your options. This is Part 2 of our business insurance series—our next episode will cover cyber liability coverage.
Time-stamped Show Notes:
0:00 Introduction
1:06 What is E&O insurance, and why do professionals need specialized coverage beyond general liability?
3:57 Why E&O is standalone coverage excluded from all other policies, and why you need a specialist broker to obtain it.
4:13 How premium costs vary dramatically based on practice area – why patent and intellectual property lawyers pay more than estate planning attorneys.
5:04 International patent claims require specialty counsel charging far more than standard insurance defense rates, driving up premium costs significantly. Here’s what you need to know.
6:00 Medical malpractice reality: why dermatologists pay less than obstetricians, and why anesthesiologists face high premiums due to drug access.
7:00 The surprising truth: over 50% of legal malpractice claims are purely administrative failures, not technical errors.
7:58 Real claim example: lawyer’s failure to appear in Los Angeles County court from Santa Barbara – distance and backup planning matter.
8:44 Why lawyers excel at risk management by staying in their lanes and being selective with clients.
9:37 How ER physicians are paid per patient visit, creating potential conflicts between volume and quality of care.
12:03 The contractor design trap: why general contractors who design staircases, handrails, or balconies face uncovered exposures.
13:31 How contractors win bids by offering design services but create massive liability gaps their standard coverage won’t protect.
14:43 Tail coverage explained: protecting your retirement from claims that surface years after you close your practice.
15:15 Picture yourself on a beach in Fiji, five years after retiring, when a claim surfaces from your past work-tail coverage protects you.
16:08 Good news about tail coverage: no applications required, elect the coverage when you retire.
Get in touch with Dean!
Dean Myers
Core Insurance Agency
dmyers@thecoreagency.com
925-876-1303
https://www.thecoreagency.com/
Transcript:
Hello and welcome to the Absolute Trust Talk. This is our video podcast here at the Absolute Trust Council, and I’m Kirsten Howe. I’m the managing attorney of Absolute Trust Counsel, and I am joined here by my guest, Dean Myers. This is our second episode, where we talk to Dean about insurance for business owners. This time, we’re going to discuss E&O, or errors and omissions insurance, which is something near and dear to my heart. I’m just reminding everybody, Dean Myers, my guest, is the owner of Core Insurance Agency, which is an independently owned commercial insurance brokerage firm. So independent, meaning he places with all the carriers. He’s not tied to any one company, so he can get you the best insurance that’s right for you. He’s located here in Walnut Creek and is our resident expert on insurance. So, Dean, welcome.
Thank you for having me back. Yeah, welcome back. No, I enjoyed this very much. Thanks so much for having me.
You’re very welcome. So last time we talked about, we started out with sort of the basics of what insurance we should be looking at when we’re just opening the doors with our new business? We covered workers’ comp, we covered general liability, and then we covered property insurance. Today, we’re going to be talking about, you know, and I know your firm works with professional service companies like law firms, CPAs, doctors, what? What kinds of people need this kind of insurance, and what is it exactly that I’m talking about?
Right. No, that’s a good question, because I think there are some industries that need it, but don’t think they need it. We’ll get to that in a minute. Yeah, so errors and omissions are when you don’t meet an industry standard of care at its most basic form. You know, lawyers have Rules of Professional Conduct. Now that may or may not be the basis of a claim, but it’s a great starting point. Same for accountants—AICPA, that’s their industry organization, and that’s their standard. Basically, any professional services firm that has a professional duty. It could be a professional trustee, and if you failed the standard of care, then you would have an errors and omissions exposure, right? So it’s a standalone coverage. It’s excluded under all other policies. Depending upon the risk profile, it’s not that expensive, relatively speaking. I guess if you’ve had claims, or if you’re in a niche area of law—say, for example, securities or intellectual property—you might be paying more than someone like yourself. But by and large, design professionals, you know, the public trusts you as an architect or an engineer to design bridges and staircases that are used by the public. Well, they probably have the highest exposure, if you will, given that if they have faulty design work, they’re exposing hundreds. There could be a really catastrophic result. Absolutely, yeah. And generally, just real quickly, this is coverage that you really want to use a specialist for. Like general liability, workers’ comp, and property insurance that we discussed in the first episode—there are a plethora of brokers in California that can handle that, right? Yeah. But this is also a carrier specialty, too. So, you won’t be able to get this coverage from State Farm. They probably don’t want to touch it for one thing. But there are specialty carriers that write just this coverage for errors and omissions.
Okay, so we obviously, in my firm, we have—we call it malpractice insurance. But I guess the nicer way of talking about it is errors and omissions. We have that. And I’m guessing that—well, I think you said that different areas of law have different rates. And how this would all work would be very much dependent on what exactly you’re doing. Just saying, “I’m a lawyer,” isn’t enough information for the carrier to decide what they need to do for you, because every year we have to fill out this renewal, and we have to say how much of your practice is this, how much is that. Even though it doesn’t change from year to year, because we only do one thing, they need it in writing. They want to know. I didn’t know you just said patents, intellectual property—that could be a high-premium type of practice.
Yeah, yeah, interesting. Well, it’s what drives it, the potential damages and the expense to cover those types of claims. For example, insurance and defense law firms. Those claims are rare, and they’re very inexpensive to defend, so their premiums are lower. But for a patent, particularly if it’s an international patent, or the laws are different in other countries, you’ve got to have that. Specialty claims aren’t just very expensive — as I mentioned in the first broadcast, they could also involve stolen property. rights on a baby seat design or something. Those are expected. First one, you’ve got to have special counsel that the carrier has to hire to defend the claim, and they’re going to charge a lot more than most insurance defense panel counsel would charge, got it right, and the resulting damages can be substantial, right, right, okay.
And then the same would go for, you know, doctors there, that’s another group of professionals that need, you know, coverage. But not every doctor is similarly exposed to risk. I’m I, I mean, I always compare us to dermatologists. When I’m giving we are the dermatologists of the legal industry. We don’t have emergencies. Nobody’s ever going to die as a result of something that we do. Nobody’s going to get thrown in prison, you know, hopefully benign. So that’s how I think of it. I’m guessing a dermatologist’s premium is lower than an obstetrician’s.
An obstetrician, and you can go from there, like we insure a lot of ER docs and anesthesiologists, who become very expensive because they have access to all the good drugs. And that could be a potential problem even if it had nothing to do with an actual surgery. So, thoracic surgeons, anybody you know, the exposures for med mal are enormous. However, most of the med mal claims, for example, and this is true for lawyers as well. They aren’t what you would think. They’re not traditional. Well, we had a bad result for lawyers. It could be if you’re an estate attorney, you need to handle that one-off family law matter? Well, you don’t have that expertise, but you know the person, right? Or, you know the couple, and you’ve a conflict of interest in the whole thing, perhaps you missed a filing deadline. Same with med mal, the doctor operated on the wrong leg or amputated the wrong hand. Failure to diagnose. All these things, you know, factor in, but they’re not what I think, what many people would expect to see claims coming from, particularly with lawyers. With lawyers, more than 50% of the claims I see are clearly purely administrative. Failure to appear. I just had a claim for failure to appear.
You think that would be easy? You think, but well, and I get it, lawyers are very busy. This was a lawyer in, oh gosh, Santa Barbara, but he failed to appear in Los Angeles County. Well, it’s a long drive. Anybody knows SoCal, and he just didn’t get there. And, oh gosh, it was. And there were other complicating factors, but not having a backup, not having I don’t know, we’re still into the weeds there with that one, but, but that’s the good news. Though lawyers do a great job managing their risk. You know, if you’re a personal injury attorney, you don’t like car accidents, then you shouldn’t take those on. If that’s not your area of expertise, you know, right? In your lane is what we like to say. Yes,
I think lawyers generally are pretty good about staying in their lane, very good. Because I just think something about being a lawyer, I don’t know if it’s I, or I don’t know which is the chicken and which is the egg. I don’t know. But something about being a lawyer is, you can’t help but look at, okay, what could possibly go wrong in every situation that you encounter? Right? That’s just our personality. So yeah,
Lawyers are doing a great job. But the reason I say that is because your premiums or yours should be flat. It’s a very robust marketplace, because I think lawyers are doing a very good job of being selective, not only in terms of their area of practice, the client selection, yeah, yeah, that’s a part of it too, yeah, for sure. But doctors don’t, I mean, depending on their situation, they don’t really get to pick the clients, like, if they’re in the ER,
Well, they don’t, particularly in the ER, in the kind of the dirty, kind of little secret here is he, er, physicians, for the most part, are paid by number of visits, so the more patients they see in the ER, the more they know, yeah, so now they want to get it right. We’re very blessed to have, oh, yeah, amazing. Amazing healthcare providers and the facilities, but if they only see two patients a day versus seeing 10, does that compromise client care or client, you know, they have a duty there as well, and the doctors don’t want to mess it up. Either. They don’t want their pride on the line, amongst other reasons, but so they don’t get to select who they see, but they’re very good at saying, Okay, I’m not an expert in, oh yeah, thoracic, I’m not. I’m going to call in, right? Consult, yeah, yeah, because they really don’t want to get involved in those situations. And I think lawyers do the same. Accountants are really good at that as well. I think more and more professionals such as yourself understand the risk-reward of your practices, right? You know where you thrive and where you don’t,
Yeah? And I think it’s not, I mean, part of that is I don’t want to get in trouble for doing the wrong thing, but you’re doing the wrong thing. But you, we lawyers, doctors, they go into those professions because they want to help people, they don’t want to do wrong. And so if the best result for this client is to hire a different lawyer, that’s what I want for them, that you know, it’s not about me.
No, it’s truly in my industry, insurance, you know, we’re in a, you know, a networking group, and I would say I turned down, hopefully professionally, half of the referrals that I get, because it’s not a fit for me. You know that that’s doing the person a favor, because they shouldn’t be doing business with me, but it’s also good risk management practice on my end as well.
Right? Okay, and so we talked about the people who obviously need you know, coverage, lawyers, engineers, doctors, accountants. Are there other categories that you see that really should be looking into this?
I do contractors, general contractors, mainly. Still, subs, what we call subs of the trade subcontractors, if a general contractor, and I have a couple of them, are designing a staircase or a handrail, or we tell them not to do this. Still, balconies, oh, well, if there’s a design component, if they’re doing the construction, that’s one thing, based on the design, somebody else’s design, yeah, exactly, yeah, but they’ll want to go out and design that staircase. Now, if they’re doing a fireplace mantle, that’s one thing. And a lot of them do that, but this is where they get themselves into trouble, because their coverage for contractors, liability, and contractual will not cover that design aspect. If you have a design component and you’re drawing up plans and you’re doing the blueprints and everything else, you’ve got an uncovered exposure,
Got it. So that’s fascinating. And so the people who should be listening to this are not only contractors. In other words, don’t do that, yeah, don’t be the engineer or the architect, but also the ultimate consumers. You know, if your contract comes to you and says, Oh, no problem. I’ll design that and we’ll build it. You’ve got to think about that, like, well, if something goes wrong, I don’t have any deep pockets here,
Exactly. And a lot of contractors, when you’re bidding for a contract, their ultimate client will come. Hey, listen, can you, can you throw this in? I’ll give you the bid if you can design the handrail and staircase for an existing one-story structure that’s being added to a second floor. And the contractor will say, Yeah, sure, I have somebody who can draft those plans and save you a ton of money. And we will go in and say, That’s a huge mistake, hire somebody. Some contractors do have design professionals on their staff, and then we can address the exposure appropriately. But it’s the smaller general contractors who want that bid. Who will they have somebody right out of college who took drafting skills or whatever, and then the contractor thinks he or she thinks that they’re they can build it to to code, which they have to obviously, and that they have the the technical ability to to build it out, and so it’ll be safe and sound. But if something goes wrong, yeah, it’s a bad one. Yeah, yeah,
That is interesting. I really, really appreciate you bringing that up. I had something I hadn’t thought about. Okay, so the last thing I want to talk about in the ENO realm, because we’re running out of time, is tail coverage. Huge. So it could be important for certain professionals. I think what that means is having coverage even after you’re not doing that work anymore, correct, like you’re retired,
Yeah, and that could be a whole basis of a separate podcast, but I’ll cut it down into really simple terms. Yeah, you want to be able to retire in peace, because that’s essentially what insurance is, peace of mind, right? You don’t want to be somewhere on a beach in in Fiji, five years after you retire, and you say, Kristen, sorry, here’s this claim. But something you did prior to when you closed your business, right? Well, the claim was made five years after you retired, so you’re like, Well, I don’t have a policy. I’m not paying insurance anymore. Yeah, right, but I’ve got this tail coverage. The insurance industry came up with a really brilliant way of protecting your past acts, even after you’ve long. And it works. It works just like you, as if you had the coverage in place in the first place. Yeah, it’s very robust, yeah.
Well, good to know. Okay, you’re going to be okay. Just make sure you elect the coverage. That’s the only thing on your part. And no applications are required.
Excellent. I’m going to go check that out. Thank you so much again, Dean. I really, really appreciate you talking to us. I learned a lot today, and I hope you’ll come back and talk to us about cyber insurance as our next episode.
Oh, boy, I would love to. Thank you so much. All right, and thank you all for listening and watching. I hope you learned as much as I did and enjoyed yourself along the way, and we look forward to connecting with you next time.
Resources Related to This Episode:
- Absolute Trust Talk Ep. 185 Are You Risking Everything? The Insurance Your Business Can’t Operate Without https://absolutetrustcounsel.com/185-insurance-business-cant-operate-without/
- Absolute Trust Talk Ep. 89 Why Your Family Might Need Lifestyle Insurance and the Latest Opportunity Benefits https://absolutetrustcounsel.com/089-why-your-family-might-need-lifestyle-insurance-and-the-latest-opportunity-benefits/
- Absolute Trust Talk Ep. 52 Estate and Financial Planning with Life Insurance https://absolutetrustcounsel.com/052-estate-and-financial-planning-with-life-insurance/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your unique needs to build a secure future now effortlessly. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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