Financial Advisor Insurance

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From making poor investments to suffering from an economic downturn can capsize everything that you’ve worked to achieve. It’s crucial for financial advisory planners to protect themselves and their businesses against any lawsuits and risks through tailored policies specifically designed for financial planners and investment advisors.

Why Do Financial Advisory Planners Need Insurance?

Financial advisors assist their clients in making the best financial decisions for that moment in time. Thus, if there is an error in judgment and the client loses money - they could be dealing with a serious lawsuit.

If you make an investment decision on behalf of your client, and something unfortunate happens in the market that is out of your control, having insurance in place will shield you from any financial responsibilities that your clients may hold you liable for.

In such a case, the insurance company will provide you with all the financial cover necessary so you can continue business as usual without being disrupted by a big financial payout.

In rare cases, financial advisory planners can also suffer bodily injuries from falls, trips, and slips at the workplace. This is when having comprehensive insurance in place will be beneficial as it will cover any medical bills, lost wages, and rehabilitation costs associated with the injury at the place of work.

What Types of Insurance Do Financial Advisory Planners Need?

Every financial advisory planner is different and so will the policies they take out. Generally speaking, the level of coverage financial advisory planners need will depend on the size of the business, their clients, the state they operate out of, the number of employees, and various other factors and risks that they are exposed to.

Below, you can find out more about the most recommended insurance policies for financial planners and investment advisors.

How Much Does Insurance Cost For Financial Advisory Planners?

The price of financial advisory planners' insurance will vary from company to company because of the various factors that can influence the final price.

On average, E&O insurance for financial advisors costs around $220 per month or $2610 annually. This particular type of insurance is necessary in case the financial advisor makes a bad investment and causes the client to lose a lot of money, and as a result, decides to sue the financial advisory firm.

For less than $35 per month or $420 annually, financial advisory planners can get general liability insurance. This policy protects the financial advisory planners in the event of any third-party injuries, advertising injuries, or third-party property damage.

Cyber liability insurance costs less than $105 every month or $1260 per year. This policy is especially important for financial planners who manage sensitive information as it provides coverage for legal expenses related to lawsuits resulting from data breaches.

If you work in an office, financial advisory planners can also benefit from worker’s compensation insurance, which costs around $40 per month or $480 per year. Such policy will cover your staff's medical expenses and lost wages in the event of an accident or illness at the workplace.

Typical Insurance Claims For Financial Advisory Planners

Financial planners and investment advisors most commonly make insurance claims regarding lawsuits that have been issued as a result of poor performance or investment decisions that have caused the client to lose money.

Regardless of the reason for the lawsuit or the claim, financial advisory planners are always recommended to take out the necessary insurance policies in order to free themselves from any financial liabilities in the event of a claim or a lawsuit.

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