Good business practices can help an investment advisory firm grow and flourish, but they only go so far in protecting the business from liabilities—both foreseen and unforeseen. To address these risks, investment advisors rely on insurance to cover work-related injuries, data breaches, employee theft, and other events.
Perhaps the most critical form of insurance for investment advisors, however, is professional liability insurance, also known as errors and omissions (E&O) insurance. But securing an E&O policy isn’t enough. It’s important to understand how these policies work, which risks are covered, and how to secure a policy with favorable language. This will place you in the best position to preserve your assets and minimize disruption to your business.