Whether you’re strictly in the business of managing other peoples’ wealth or you have a person or persons on staff who are solely responsible for managing your company’s money and investments, you face particularly unique exposures. As a financial advisor, you could recommend the wrong investments. Your fiduciary—who could be a director, CFO or hourly employee—could make irresponsible investments on your company’s behalf, fail to diversify client investments or conduct negligent investment practices. In either of these instances, you could be held financially liable if a client decides to sue. Fortunately, an errors and omission policy can protect yourself and your company from financial devastation.
Even if you do everything by the book, a client or customer could walk away dissatisfied. Disgruntled customers can be ruthless, and many have no qualms about suing a company when money is at stake. An E&O policy can help you cover the cost of attorney fees and litigation when this does happen, and if the courts hold you responsible, the right policy can even cover all or part of the settlement. Depending on the policy you select, you may even be covered for business interruption, business loss, and reputation management when a lawsuit does arise.
If you want to protect your business, your wealth and your reputation, invest in a errors and omission policy today.