Investment Professionals’ Errors and Omissions Insurance

  • Tailored coverage for individual Registered Investment Advisers and RIA firms
  • Portable, individual coverage for you or your firm -- no sharing of limits or coverage cap – with matching prior acts protection for qualifying risks.
  • Fast, affordable and comprehensive legal liability protection backed by the solid resources of one of the world’s top 20 general insurance and reinsurance groups.
  • Instant coverage via payment by credit card or bank debit card.
  • Premiums start at $850 for an individual RIA ($950 for a firm) and coverage can be expanded to include investment product sales, life insurance agent services, management liability and cyber perils.
  • Dollar One defense coverage with a standard indemnity deductible of $5,000 per claim.
  • Includes Costs of Corrections (Trade Errors) coverage.
  • Covers Fraudulent Instruction Funds Transfer Claims up to $150,000.

All service businesses need E&O insurance. Often customers, lenders, and affiliates require evidence of E&O insurance before awarding a job. We provide you with an easy way to meet these insurance requirements and protect you in the event of a problem.

What is E&O Insurance?

Errors and Omissions [“E&O”] policies cover judgments, settlements and defense costs if you are sued by a client. Even if the lawsuit is groundless, thousands of dollars may be needed to defend the lawsuit. A lawsuit can bankrupt you. Simply speaking, E&O coverage protects for you in the event that your error or omission has caused a financial loss for your client.

Who needs E&O Insurance?

The vast majority of investment professionals purchase E&O insurance protection. In certain States, coverage is mandatory (or may be soon). Advisers, Financial Planners, Broker-Dealers and Life Insurance Agents are traditionally the target of lawsuits from dissatisfied clients. E&O insurance pays for a lawyer to defend you (or represent you at an arbitration hearing) and the cost of settling the claim.

Why do I need coverage?

To put it very simply, we all make mistakes - even with top quality staff and the best business practices in place. A mistake can cause a loss of reputation to you and a financial loss to your client. If you don't buy E&O insurance, you can be taking a serious financial risk. E&O losses are not covered under a general liability policy. And even if you are not at fault, the cost to defend a claim is time consuming and expensive.

When should I buy E&O insurance?

The best time to buy an E&O policy is before a job starts. If you are in a service business make E&O insurance a part of your insurance program. Many contracts with customers, banks or affiliates will require E&O insurance to be in place. In some cases, it is a selling point with your customers. It gives them the peace of mind of knowing they will be compensated if there is an error or omission.

What is covered by E&O Insurance

The AdvisersGold™ select policy provides coverage for services you perform for a client or professional association in your capacity as an appropriately licensed, accredited or certified Investment Adviser or Registered Representative. This includes financial Planning Services, services as a life insurance agent and services as an advisor as defined by ERISA Section 402(c)(3). Cover is extended to include activities as a fiduciary and social engineering liability [1]. Coverage can be extended to include a variety of cyber liability and first party cyber coverage.

[1] subject to the full policy terms and endorsements

What affiliations or professional groups receive a premium discount?

The following professional affiliations receive expanded coverage and a premium discount:

  • Fi360
  • The Financial Planning Association (FPA)
  • The National Association of Insurance and Financial Advisors (NAIFA)
  • The National Association of Personal Financial Advisors (NAPFA)
  • The Society of Financial Service Professionals (FSA)
  • XY Planning Network
  • Garrett Planning Network
  • Association for Financial Counseling & Planning Education® (AFCPE®)
  • Avantax

Who can buy coverage through AdvisersGold™ Select?

The AdvisersGold™ Select program is available to most RIAs but specifically you must have:

  • earned no more than $1,000,000 in revenue as an individual RIA (or $2,000,000 for a firm) in the last year
  • no more than 5% of your income earned from the sale of alternative investments
  • no FINRA, SEC or state regulatory complaints against you or any member of your firm in the past five years
  • not been formally accused of violating any professional associations code of ethics
  • not been audited by a regulatory agency in the past 5 years
  • no ownership interest in any investment product you sell or recommend to a client
  • not provided personal management services (e.g. talent management or bill paying, etc.) to any professional entertainers, celebrities, athletes or musicians
  • not been the subject of an errors or omissions claim in the past five years
  • not been made aware that you or any person proposed for this insurance of any potential Errors & Omissions claim that may be brought against you
  • not been the victim of any social engineering, fraudulent wire transfer request or other criminal act designed to deceive you into sending funds to a third party

If you do not qualify, coverage may be available via our other errors & omissions programs specifically designed for investment professionals. Contact us by email or (201) 345 2440 for assistance.