Insurance for Financial Planners

Finance Planning Insurance - Protect your advice

Insurance for Financial Planners

Finance Planning Insurance - Protect your advice

Insurance Broker finding the best insurance for your business

Professional Indemnity Insurance

Mistakes happen, and most can be rectified without any consequence. However, some could result in your clients suffering a financial loss. Professional Indemnity is a policy that protects the advice and recommendations that you, your business, your employees, and authorised representatives provide. A professional indemnity insurance policy will also pay the legal and defence costs associated when a client notifies you of a potential breach.

Get a Quote

What does Professional Indemnity cover?

Professional Indemnity Insurance can offer general protection which may include cover against:

Making a mistake that was not intentional

A client misinterpreting the advice you’ve given

Copyright claims

What is typically not covered?

Public Liability Insurance Broker

Personal Injury claims that result from the advice you’ve given

Public Liability Insurance Broker

Intentional Acts including defamation, slander, libel

Public Liability Insurance Broker

Claims made if you don’t have an active policy in place

Public Liability Insurance Broker

Prior Known Circumstances

Public Liability Insurance Broker

Industry specific exclusions that the insurer have applied

Public Liability Insurance Broker

Contractual Liability

Public Liability Insurance Broker

Work done before your retroactive date

Public Liability Insurance Broker

Activities done outside of your insured jurisdiction

Insurance Broker Financial Partners

Do I need Professional Indemnity?

Do I need to insure for Professional Indemnity if I’m a Corporate Authorised Representive of an existing Dealer Group?
If you are a Corporate Authorised Representative of a dealer group, you will be covered under their policy and will not require a policy of your own.

Do I need Professional Indemnity Insurance if I hold the Australian Financial Services License?
Yes. As part of ASIC’s Requirements, Australian Financial Services (AFS) licensee’s must hold adequate Professional Indemnity Insurance cover.

Get a Quote

How Morgan Insurance Brokers can help you

We make complex, easy.

Are you applying for a new Australian Services Financial License, or have an existing policy you’d like reviewed? We can help.

As your Insurance Broker, we can approach a numerous panel of insurers on your behalf that you would not have access to otherwise. We provide you with an objective comparison of their covers, exclusions, benefits, and secure competitive pricing.

Get a Quote
Insurance Broker with happy clients

Frequently Asked Questions

Professional Indemnity Insurance for a Financial Planner is determined and based off a few factors such as

  • The products that you offer
  • How many authorised representatives you have/if you’re a dealer group
  • Your annual revenue
  • The indemnity limit that you choose
  • What excess limit and type you select
  • Your claims history
  • What risk management controls and compliance standards that you adhere to

As per The Corporations Act RG126, ASIC  requires you to hold adequate Professional Indemnity Insurance, with a minimum of $2,000,000 per claim, and at least one reinstatement. A reinstatement essentially means that when your original Indemnity limit has been exhausted, and you suffer another claim in the same policy period, your Indemnity limit will be reinstated. An important note to consider is that legal and defence costs should be paid in addition to the $2,000,000 Indemnity limit,  and not included within.

Determining an Indemnity limit per claim, you should consider a limit that is equal to your annual revenue. However, depending on the below considerations, you may require a higher limit.
Items that you will need to consider when determining a limit suitable for your business are:

– the nature of the financial services business
– the volume of business and number of clients
– the type of clients
– the number of corporate authorised representatives that will be under your license

If you have selected to insure for a “costs in addition” structured policy, your Insurer will pay the legal and defence costs occurred in addition to your indemnity limit. For example, if you were liable to pay a $2,000,000 claim for financial compensation to your client, and incurred $500,000 of legal costs to defend your business during the course of the proceedings, your Insurer will pay the $500,000 in addition to your Indemnity limit.

If you have selected to insure for a costs exclusive policy, this means that the legal and defence costs will be included in your Indemnity limit. A costs exclusive policy is less favoured as you could exhaust your Indemnity limit and could find yourself contributing to the cost of legal fees.

An excess, also known as a deductible will apply to every claim for compensation paid.

Many insurers will usually have a minimum excess that they apply. This excess can differ for each insurer.

A professional indemnity insurance excess can be either be a “costs inclusive” arrangement, or a “costs exclusive”. A costs inclusive excess means that if there were any legal or defence fees incurred, your excess will apply. A costs exclusive excess is preferable as it means that you shall only be liable to pay the excess if there is a paid compensation claim.

As a Financial Planner, you are likely to see your clients regularly, whether it be at your office, or at your clients homes. Fortunately, this cover will extend Australia Wide. Public Liability Insurance will protect you from any third party property damage claims or third party injury claims where you’re found negligent and liable. It also extends cover for any legal and defence costs associated with claims brought against you. Although the exposure is relatively low, it is still deemed an essential policy to protect your business.

Please contact us for more information on how we can assist you with these covers.