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Financial Services Business Insurance

What is insurance for financial professionals?

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Although your firm may take great care to provide the highest quality services, when dealing with financial services, there is a heightened risk that clients will find fault with your services. All types of financial services businesses face the risk of unsatisfied clients and lawsuits. Having the right insurance coverage in place can help to protect your business if you are sued.

In addition, your financial services business also faces risks common to running any business, such as property damage and other liabilities that relate to the operations of your business. If a client trips and falls in your office, or if one of your employees causes a car crash while running a business errand, buying business insurance will help to safeguard your company’s assets.

Whether you are an accountant, auditor, financial planner, registered investment advisor, or tax preparer, you can buy business insurance to protect against the professional and physical risks of running a professional financial services business. To purchase insurance, your business signs a contract with an insurance company and makes a payment, called a premium. Should any unexpected costs arise due to these risks, a comprehensive insurance plan will shoulder the financial burden for your company.

Types of insurance for financial professionals

Professional Liability Insurance

Planning and advising clients on their finances makes a significant impact on their lives, but no financial professional can guarantee that mistakes will not be made. Even with no mistakes on your part, the financial markets may turn and a client may become unhappy with your services and decide to file a lawsuit against your business.

Professional liability insurance, also known as Errors & Omissions insurance, protects your company against claims of negligence, malpractice, or misrepresentation. It will cover you against claims of a breach of fiduciary duty or lack of regulatory compliance. It also provides legal coverage, including the cost of representation should a lawsuit arise. Example: You forget to inform your client of the taxes due on an investment, and the client files a claim of negligence.

» Learn more about professional liability insurance for for financial services

General Liability Insurance

As a business owner, you take precautions to ensure the safety of your premises, but accidents can still happen at any time. Even though financial professionals do not often experience these kinds of accidents at the office, it is never unwise to protect against unexpected incidents that may prove to be significant financial burdens for your business.

General liability insurance provides coverage to your business in the case of bodily injury, personal injury, and property damage caused by the business’ operations, products, or injury that occurs on the business’ premises. General liability insurance does not cover liability that arises directly from providing financial services or advice. Example: A client slips and falls because of wet floors in your office and must be rushed to the hospital.

» Learn more about general liability insurance for for financial services

Property Insurance

Property insurance protects your company against any damages to your property caused by disasters such as windstorms, fires, and water damage from burst pipes, as well as theft and vandalism. Property insurance can cover not only the value of the property but also salvage, cleanup, and losses to business income due to the interruption of business operations.

For financial services businesses, property insurance can cover business property such as computers and electronic equipment, furniture, and even artwork. Property insurance mitigates the risks associated with these types of catastrophic losses. Example: A fire in your office building destroys the inside of your office and forces you to halt operations for several weeks and make arrangements for the cleanup.

» Learn more about commercial property insurance for financial services

Business Owner’s Policy for Small Businesses

For small financial services businesses, a Business Owner’s Policy can bundle general liability and property insurance into a single policy. By combining these coverages together, you can save money on your premiums, as a bundled policy may cost less than purchasing separate policies.

» Learn more about business owner’s policies for small business

Workers’ Compensation Insurance

Workers’ compensation insurance will cover costs associated with an employee becoming injured or sick while on the job. Should an employee suffer a work-related injury or illness, “workers’ comp” will pay their medical bills and lost wages. In most states, workers’ compensation insurance is required for businesses that have employees.

For financial professionals, the risks of physical injury are low but still may occur. Common workplace injuries in financial firms include carpal tunnel syndrome or stress-related illnesses. Example: Your employee drops a heavy box of documents he is carrying at the office and injures his foot. He is rushed to the hospital for surgery and needs to take several weeks off work.

» Learn more about worker’s compensation insurance for financial services

Other types of insurance for financial professionals

Insurance for employees

In addition to the property and liability coverages for your business covered above, your business may also want to sponsor group health, life, and disability insurance for your employees. These insurance coverages help to protect the financial well-being of your employees and their families in the event that your employees become sick, get injured, or die unexpectedly.

Often, employers sponsoring group health, life, and disability insurance can obtain lower rates for this insurance than the rates your employees could get if they were to try to buy these coverages as individuals. Offering this coverage can help you attract and retain the best employees for your financial services firm.

What financial professionals need 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:

Insurance can cover financial services professionals in a wide variety of professions. Some common professions that need insurance include:

Why do financial professionals need insurance?

Putting your clients at ease and winning new clients.
Some types of insurance, including workers’ compensation insurance and disability insurance, may be required by law.
Accidents and unexpected events can happen.
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