Professional Liability Insurance
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Professional Liability Insurance For Financial Planners
Financial planners provide extremely important and critical services to their clients. You are trusted with the future financial stability of each person you work for, and that is a very big responsibility. If you make mistakes in your client's financial plans, you could end up costing them a lot of money. That's why it is so important for your firm to protect itself with financial planners professional liability insurance.
Professional liability insurance is also known as errors and omissions (E&O). It is designed to help you when professional mistakes are alleged or actually happen. If you make a professional mistake that causes your client to lose money, they will sue your financial planning firm. Sometimes a client will sue your firm for claims that you are not actually at fault for as well. Regardless of whether you actually make a mistake or not, lawsuits take time and money to resolve. Without financial planners professional liability insurance, you will be left to handle the legal and financial burdens all on your own.
For example, if a client changes jobs, he may need to have his 401k rolled over within a specified time frame to avoid stiff penalties, fees or taxes. If your firm fails to submit the required paperwork on time, that client may sue you for the fines and penalties he incurs. Financial planners professional liability insurance helps whether actual mistakes are made or they are simply alleged by a client.
Depending upon your level of coverage, your financial planners professional liability insurance policy can pay for the legal expenses that arise when defending your suit. It can also cover lost wages while you're in the court room, and it pays for settlements or awards when needed.