Errors and Omissions Can Be Disastrous On Both Sides of the Equation

It was one thing to be grieving, but another thing to be charged unfairly because of someone else’s mistake, thought Janet as she looked at the property tax bill that came in the mail that day. The home that had belonged to her family since the early 1960s, the home that she’d grown up in-that home was now Janet’s alone after her mother passed away after a long illness. Janet was happy to have the home remain in the family, yet saddened at the way it had come to her. The attorney she had hired to handle the mystifying mounds of paperwork that ensued after her mother’s death-dealing with everything from closing out bank accounts and certificates of deposit to changing the legal ownership of the various automobiles, the motor home, and the fishing boat that were in her mother’s name-seemed to know what he was doing; he had been referred to her by a church member, so Janet didn’t think it was necessary to do a lot of background checking on the attorney’s references. However, she would learn soon thereafter that not only should she have done reasonable due diligence in selecting an attorney to represent her, an expensive mistake that was made would end up involving her in the last thing she needed to occupy her mind-an errors & omissions insurance claim.

A simple mistake can cost thousands

Apparently the attorney had failed to file a single form with the state that would have enabled Janet to maintain the property tax amount on her home at the same rate charged to her mother, rather than a stepped-up rate based on today’s value. The difference made her property tax bill jump from hundreds of dollars a year to several thousand dollars a year, money that Janet simply didn’t have. She was on the phone for weeks with the tax office just to find out what had happened; when the tax investigator finally figured out that failing to file a single form was the cause of the huge increase, Janet was devastated; she’d misplaced the trust in her attorney to handle everything, and he dropped the ball.

Janet is working hard to get everything sorted out; the tax office says it’ll take months to more than a year as they’re so backed up, but in the meantime the entire amount must be paid or else the home could be seized for failure to pay property taxes. To do so, Janet has borrowed money at exorbitant interest rates as a last resort. She expects to be reimbursed by filing an errors & omissions lawsuit against her attorney, as his negligence in failing to file all the necessary paperwork got her in the jam she’s in. Later on, she learned that the attorney had several complaints against his business practices-information that she could have easily found out if she’d only checked with the local Better Business Bureau. Fortunately for both the attorney and Janet, the attorney had purchased an E&O policy for his one-person business, which will pay for court fees, legal defense, and even damages that will likely be payable to Janet as the plaintiff in the lawsuit. The lesson here on both sides: even in the grip of loss, make sure you check the performance record of someone you intend to hire-and if you are the one being hired, utilize a checklist or an assistant to confirm that each milestone in a multi-step process has been executed.