Did you recently start a small business related to the financial services industry? If so, you might feel a sense of accomplishment, especially if you have already garnered attention and recruited your first clients. You may feel as though you know the industry well. Perhaps you have an impressive portfolio with success stories that prove your competence and abilities. Certain skills matched with formal education and degrees and certifications in the finance industry might make you one of the most sought-after independent advisors in your area in a short period of time.
Most individuals who decide to help others manage or build their wealth pursue their careers because they have a desire to help others. They do not seek to take advantage of their clients by squandering their investments or intentionally making bad decisions.
Depending upon the services offered, some financial advisors are upfront with investors that there are risks associated with volatile markets. They may even take legal steps and present paperwork for reviewing and signing prior to providing services.
Despite the best and most ethical business practices, it is still possible for some individuals to be dissatisfied with services. This can lead to legal battles and more. This is why it is ideal for individuals who provide a business service in the finance industry to have professional liability insurance.
You may get involved in business decisions on behalf of your clients that have high dollar amounts associated. Some of your clients may provide funds to you at their own discretion as requested. Others may trust you to be in full control of their finances and investments.
Liability insurance will help to protect you if you make errors or mistakenly omit to perform a duty that results in a loss for your client(s). This is sometimes difficult to understand or determine, which is why these matters often end up in court.
Professional liability insurance does not cover malicious or intentional acts that result in losses, but you could still get sued by clients. If the insurance company agrees with defense against the claims, the policy can cover the cost of legal battles and possibly court-ordered restitution. Partial or full amounts may be paid, depending on what the policy outlines and limits.
Even though you are a sole proprietor at this point in your business, your coverage needs could change if your business grows or you decide to create a partnership. These changes should include a policy review so that you know who is covered. Your initial professional liability policy may only cover you. Some policies may cover employees but not independent contractors who work with your organization.
To learn more, contact a professional liability insurance provider.Share