Can a power of attorney obtain errors and omissions insurance to protect against legal liability in Pennsylvania? - Pennsylvania
The Short Answer
Potentially yes, but it depends on (1) whether an insurer will underwrite a policy for a non-professional “agent under a power of attorney,” and (2) whether the cost can be paid from the principal’s funds under the power of attorney and Pennsylvania fiduciary-duty rules. Even with insurance, a Pennsylvania POA agent can still face personal liability for breaching fiduciary duties.
What Pennsylvania Law Says
In Pennsylvania, a power of attorney “agent” is a fiduciary. Once the agent accepts the role, the agent must act in the principal’s best interest, in good faith, and within the scope of authority granted—and must keep records and exercise appropriate care and diligence. If an agent’s conduct falls outside those duties (for example, self-dealing, poor recordkeeping, or acting beyond the document), insurance may not prevent a surcharge claim or other legal exposure.
The Statute
The primary law governing this issue is 20 Pa.C.S. § 5601.3.
This statute establishes that a POA agent who has accepted appointment must act in the principal’s best interest and good faith, stay within the granted authority, and meet specific fiduciary duties (including recordkeeping and acting with appropriate care and diligence).
Why You Should Speak with an Attorney
While Pennsylvania law defines an agent’s duties, deciding whether E&O coverage is available and whether the principal can pay for it is fact-specific—and mistakes can create personal exposure for the agent and disputes within the family.
- Strict fiduciary standards: Even “well-intended” decisions can trigger claims if beneficiaries believe the agent failed to act loyally, keep adequate records, or acted outside the POA’s scope under 20 Pa.C.S. § 5601.3.
- Coverage gaps and exclusions: Many E&O policies exclude intentional misconduct, self-dealing, or certain fiduciary claims. An attorney can help you evaluate whether the policy you’re being offered actually matches the risks a POA agent faces.
- Who pays and authority to pay: If premiums are paid from the principal’s money, you want to be sure that expense is authorized and defensible as being for the principal’s benefit (not primarily the agent’s). Otherwise, it can become a flashpoint for later objections.
If you are serving (or about to serve) as agent, a short legal review of the POA document and the proposed insurance arrangement can prevent allegations of misuse of funds and reduce the chance of litigation later.
For more Pennsylvania-specific background, you may also find these helpful: What authority a financial POA gives an agent in Pennsylvania and How to choose and appoint a POA agent in Pennsylvania.
Get Connected with a Pennsylvania Attorney
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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.