Professional Liability Insurance Coverage For Financial Services
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What Is Professional Liability Insurance for Financial Services?
As a financial service professional, your work involves attention to detail. This leaves you open to being sued if you make a mistake. The standard Commercial General Liability Insurance policy may not cover your legal costs.
Financial services professionals need Professional Liability Insurance (also known as Errors and Omissions insurance). This coverage will protect you in the event you’re sued as a result of a real or perceived mistake that results in financial loss for your client or a third party.
Fortunately, EasyCover offers Financial Services Professional Liability Insurance to ensure you’re protected. We make it quick and convenient with our online system:
Step 1: Enter your information for your free quote.
Step 2: Select the policy coverage that works for you.
Step 3: Pay online and receive your policy documents.
You could be protected in less than five minutes with EasyCover.
What does financial services professional liability insurance cover?
EasyCover’s Professional Liability Insurance for financial services offers coverage for legal expenses and damages in the event you are sued as a result of professional negligence or mistakes that result in financial loss for your client or a third party. Whether or not the claim is unfounded, expensive legal proceedings to defend yourself are necessary. Your Professional Liability Insurance would protect you.
EasyCover offers critical protection needed by financial service professionals in a way that is affordable, quick and easy
Financial services Professional Liability Insurance covers your legal expenses. This includes your defense costs as well as any judgement and settlement awards, subject to policy limits and conditions.
You have three coverage options with EasyCover Canada:
Your coverage limit is the maximum amount that will be paid out over the 12-month policy period, regardless of the number of claims and includes associated costs of litigation.
Your optimum level of coverage depends on: your contract requirements, the number and size of your clients, the type of clients you have and their activities, the overall value of the contracts, and the potential costs of a legal claim that might be made against you.
Deductible amounts range from $250 to $1,500, depending on your revenue. The deductible is a portion of your claim that you are responsible for and you pay a deductible for each claim. For example, if your deductible is $1,000 and you have two claims within one policy term, you would pay $2,000 in deductibles for that term
Professional Liability Insurance for financial services only covers liability for financial or reputational damage associated with providing your service or advice. It won’t cover third party bodily injury or property damage – you’ll need General Liability Insurance for those types of claims. You also won’t be covered for any criminal acts or intentional dishonesty or fraud.
You must inform your insurer of any circumstances that could result in a lawsuit. For example, if your client communicates to you that they believe you made a mistake, you should contact your insurer just in case it escalates to litigation.
Professional Liability Insurance for Financial Services in Action
Here a few scenarios where a financial services professional would need Errors and Omissions Insurance:
- Administrative Mistake: This is when an administrative mistake is made resulting in a financial loss for a client, who is now holding you liable for that loss. This could involve incorrectly completing documentation or simply placing a decimal in the wrong spot. However minor the mistake, you could find yourself defending a claim from a disgruntled client. Professional Liability Insurance would help cover your legal costs and damages.
- Missed Deduction: As a tax accountant, if you neglect to obtain a deduction that your client would have been entitled to, your client may have to pay extra taxes or perhaps late filing penalties. They could hold you responsible for these extra costs. Your Errors and Omissions Insurance would cover your litigation costs.
- Misrepresentation: If you present information in a way that might be seen as misleading (like rounding numbers), and this information is relied upon and causes financial loss, your Professional Liability Insurance will respond and pay for your costs of defense (subject policy terms and conditions).
- Loss of Documents: You could be held responsible if you lose or unintentionally destroy your client’s documents. EasyCover provides an automatic extension of coverage for this type of loss.
Risk Management for Financial Services
While your financial Professional Liability Insurance is an important part of risk management, it’s best to avoid litigation in the first place. Here are some risk management tips for mitigating your risks and reducing your stress:
Open and honest communication is the key to professional relationships. Clearly communicate expectations and each parties’ roles and responsibilities. Address any ambiguities up front and ideally have the terms of the relationship defined and outlined by contract.
Being honest about your limitations and providing referrals for services or advice you are not qualified to provide is also a good practice.
Record keeping helps keep you organized and can be used for defence against errors and omissions claims. Follow up conversations with an email verifying the discussion and conclusions. Regularly back-up your information and files and ensure back-ups are appropriately stored and secured.
Establish procedures to ensure your work is done correctly. Mistakes happen, but proper processes can ensure work is reviewed and double-checked for errors before being released.
Is there software available that might assist with quality control?
EasyCover makes financial services Professional Liability Insurance easy. Take five minutes to get a quote and purchase a policy that ensures you can work with confidence knowing you’re protected with EasyCover’s Professional Liability Insurance for financial services.
Financial Professions Protected by EasyCover
At EasyCover, we offer professional liability insurance for financial services to a wide range of roles, including:
- Credit Controllers
- Management Accountants
- Financial Controllers
- Financial Analysts
- Payroll Administrators
- Regulatory reporting
If you don’t see your financial services profession listed here, chat with us and we’ll see what we can do!
Protect yourself from the unexpected.
Get Professional Liability Insurance for Financial Services from EasyCover today.Start Quote