From professional liability to data breach insurance, learn how to understand and purchase the right insurance for your business. Check out our comprehensive articles and resources to discover how you can protect and grow your financial services business.
Financial Services Insurance Basics
Types of Financial Services Insurance
Who needs Financial Services Insurance?
Whether you are a small business or a growing enterprise, business insurance can help protect your bottom line from common and uncommon risks as financial professionals and win the trust of new clients. It gives you the peace of mind that an unexpected event or situation like a lawsuit, injury, or disaster will not bankrupt or cause a significant financial burden to your business. You may need insurance if:
- Your clients require liability insurance
- Regulations require you to purchase insurance
- Your work has an impact on the financial futures of your clients
- You hire employees
- You store the private information of your customers
- Your business owns property
- Your business owns automobiles or work vehicles
Financial Services Insurance by Profession
Why is Financial Services Insurance important?
Putting your clients at ease and winning new clients.
Benefits: Clients want to know that the quality of the services they are purchasing are first rate. Buying professional liability insurance is a signal to your clients that you are providing a guarantee for the quality of your services. Should any error or omission occur, you have access to a financial safety net that will compensate the impacted customers.
Risks: Without investing in professional liability insurance, your company would be responsible for any costs associated with a faulty product or service and legal fees incurred to defend against any potential lawsuits from clients. Costly lawsuits and settlements can put small businesses at risk for bankruptcy.
Some types of insurance, including workers’ compensation insurance and disability insurance, may be required by law.
Benefits: Although business owners can hope that no one will be harmed on the job or become disabled, accidents and illnesses do happen. You are required by law in most states to purchase workers’ compensation insurance and disability insurance for your employees. When an illness or injury happens, you will have peace of mind that your insurance will cover the costs of the situation.
Risks: If you do not invest in workers’ compensation insurance and one of your employees is seriously injured on the job, you will be responsible for his or her medical expenses and lost wages. In some states, not carrying workers’ compensation insurance is a felony and may also result in a significant fine or imprisonment. Similarly, long term disability insurance is also required by law in many states.
Accidents and unexpected events can happen.
Benefits: Business insurance gives your company financial protection. By purchasing insurance, you protect the investments of time and capital you have made into your business. If an adverse event occurs, you can feel more secure knowing that you have a safety net that covers related costs and helps ensure the continued operation of your business. Insurance professionals can also help you proactively assess the risks associated with your business and consult on the most suitable plans.
Risks: While it is easy to get caught in the belief that “it won’t happen to you,” the truth of the matter is small businesses can easily go out of business with one devastating incident. Whether it is human error, accident, illness, data breach or property damage, protecting against the risks that can strike any operation is critical to keeping your company healthy.