One of the most important conversations that you, as a financial planner, can have with your clients is about risk\u2014how much they feel comfortable with and how they can protect themselves against it.<\/p>\n
When it comes to your own business, you need to protect yourself against risk, too.<\/p>\n
As a financial planner, you face a difficult challenge. It’s impossible to accurately predict the success of an investment, given the financial market’s volatile nature. If a downturn in the market leads to\u00a0a client losing their money, the SEC allows you to be sued.<\/p>\n
CFPs\u00a0face more than just professional liability; you may also be responsible for property damage or\u00a0workplace injuries. And then there’s basic business risks to consider.<\/p>\n
With all the responsibilities that lie on your shoulders, choosing the right insurance is essential. Here are the five types of insurance that every financial planner needs to protect themselves and their business.<\/p>\n
As a finance professional, you may think that the chances of incurring a general liability claim are small\u2014and you’re probably right. But just one costly lawsuit can destroy all that you’ve worked so hard for. It pays to cover your bases, and general liability insurance<\/a> does just that.<\/p>\n This type of insurance offers protection in the unlikely event that a client or an employee claims that you or someone else at your business caused them bodily harm or damaged their property. For instance, what if a client slipped on an unmarked wet floor and was injured or broke their computer in a fall? In the case of such a situation, general liability insurance would offer protection against costs such as legal fees or potential settlements.<\/p>\n You know exactly how important it is to cross every t and dot every i, but you’re human, and sometimes even careful humans make mistakes.<\/p>\n In the finance industry, even small mistakes can have costly results. Errors\u00a0and omissions\u00a0insurance<\/a>, also known as professional liability or E&O insurance,\u00a0offers protection if a client believes that your mistake cause them to suffer a loss.<\/p>\n Claims\u00a0that might call for E&O coverage may include:<\/p>\n E&O insurance may cover costs related to legal defense, judgments, and settlements. No matter how careful you are, mistakes happen or a client may file a baseless claim. Either way, E&O insurance protects your business against such claims.<\/p>\n In today’s world, we rely on computers and digital technology more than ever\u2014and cybercrime is more prevalent than ever.\u00a0If your clients’ sensitive financial and personal data is breached or mishandled, your firm may be responsible for legal fees, reparations, and settlements. You’ll also have to notify your clients that their data has been compromised, comply with regulations, and\u00a0offer credit-monitoring services. Often, you’ll also need to invest in PR to\u00a0ensure\u00a0that your firm’s reputation isn’t sullied.<\/p>\n Even small business owners need to protect themselves, as hackers don’t care about the size of a company; in fact, some may target smaller firms, assuming they don’t have elaborate cyber security measures in place. As a financial planner, you work with sensitive client information, such as social security numbers, bank account numbers, and credit card information, making your firm an attractive target.<\/p>\n Cyber liability insurance<\/a> protects your firm against costly data breaches and other cyberattacks, and will help you recover once a breach has taken place.<\/p>\n Whether you own or rent your property, you must protect your physical assets. Threats such as theft, fire, and certain types of weather damage add up quickly, compounding any losses you suffer when property damages affect your ability to do business.<\/p>\n Commercial property insurance<\/a> protects your business against threats that are outside of your control, such as theft of your computers and other office equipment, clean-up after a fire, or damage from a wind storm.<\/p>\n In some cases, property insurance also offers coverage to employees working offsite using your equipment; for instance, if you travel to a client’s office and take an office\u00a0laptop with you. Depending on the specific threats\u00a0in your area, you may also want to consider additional property damage coverage for issues such as flood or earthquake damage that aren’t always included in standard policies.<\/p>\n If you value peace of mind, consider an umbrella policy. If your firm is involved in a high-dollar lawsuit, an umbrella policy will add coverage above and beyond your general liability and other policies. Also known as excess liability insurance<\/a>, umbrella policies kick in if a claim exceeds your existing coverage limits.<\/p>\n Imagine your business is involved in a costly lawsuit, and the court finds your firm liable for damages far above the limits of your policy. Unless you have an umbrella policy, you’ll be liable for that money out of your own pocket.\u00a0Umbrella coverage offers an extra layer of protection and peace of mind.<\/p>\n","protected":false},"excerpt":{"rendered":" One of the most important conversations that you, as a financial planner, can have with your clients is about risk\u2014how much they feel comfortable with and how they can protect themselves against it. When it comes to your own business, you need to protect yourself against risk, too. As a financial planner, you face a […]<\/p>\n","protected":false},"author":5,"featured_media":4450,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[76,497],"tags":[181,241,313,106,126,323,54],"class_list":["post-4449","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-insurance","category-growing-your-business","tag-advice-for-business-owners","tag-commercial-property-insurance","tag-cyber-liability-insurance","tag-errors-and-omissions-insurance","tag-general-liability-insurance","tag-insurance-policy","tag-umbrella-insurance"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t2. E&O Insurance<\/h2>\n
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3. Cyber Liability<\/h2>\n
4. Commercial Property Insurance<\/h2>\n
5. Umbrella Policy<\/h2>\n