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Mar 16

Reasons Why Professional Liability Insurance is a Great Option for Financial Planners

Posted by at 14:42 | Default | Comments(0) | Reads(980)

If you are a financial advisor doing the balancing act between life and money, then professional liability insurance could be the long pole that can help you do the balancing act really well.

You might argue that, as someone who racks up a pile of money, you might never need insurance. But if you do, you could be happier.

Professional Liability Insurance can protect you against losses due to negligence and claims made by your clients, which could arise due to misinterpretation or malpractice. As a financial planner, it’s important to be prepared to face unexpected claims when dealing with the public. If not, that could damage your personal reputation as well as your company’s image.    

Why do you need it?

Mistakes happen in any profession and they are not so uncommon in markets that fluctuate up and down all day long. As a financial planner, you would be handling people’s money which could sometimes be their lifelong savings.

If any money is lost due to whatever fault or mistake from your end, they’re going to sue you. That can be stressful and time-consuming. Professional Liability Insurance can provide adequate coverage for unexpected losses and thereby minimize your risk and aid in the smooth running of your business.

What is covered?

What is covered and what is excluded depends on the policy that you choose. In most cases, you will get legal coverage, breach of fiduciary duty, and regulatory compliance. You will also be protected you against penalties due to mistakes such as not informing the client about a 401(k) rollover timeframe when he/she changes jobs.      

Benefits Of Having Professional Liability Insurance:

It helps you perform your duties to the best of your ability without worrying about some of the most unpredictable risk factors in trading. And it also helps develop people’s trust on your company.
It protects you against huge financial losses that could arise due to negligence and certain unexpected scenarios.

For more details on the purpose of the coverage, services included, and exclusions make sure to get in touch with a professional insurance company. Of course, plans and pricing will differ from company to company. To get an idea of what you could expect from the best, please have a look at the top insurance companies.

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