Rhode Island Financial Planner Insurance Policy Information
Rhode Island Financial Planner Insurance. If you're thinking about starting a business that offers financial planning services, there are a lot of things that you need to attend to. Of all the different factors you need to consider, insurance should be high on your list of priorities. Financial planners, like any other business owner, face a number of risks. The best way to protect yourself from these risks is by making sure that you put together a comprehensive insurance portfolio.
A RI financial planner offers a wide variety of services to individual clients, including an analysis of their financial goals, reviewing cash flows, identifying risk management and insurance needs, financing educational or retirement goals, investment, tax, and estate planning, and succession planning if the client owns a business.
Goals are set with the client to create a financial plan or strategy tailored to the client's unique financial situation. The financial planner may be associated with an insurance operation, accounting operation, real estate operation, or work independently. Services may be offered on a fee basis or commission basis.
Because of the varied areas of knowledge/expertise needed by a financial planner, his or her background, education, certification, experience, and professionalism are items to consider.
Why is insurance so crucial for financial planners? What specific types of coverage should professionals in this industry carry? Below, you'll learn more about Rhode Island financial planner insurance so that you can ensure your business is properly protected.
Rhode Island financial planner insurance protects your investment advice firm from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Why Is Insurance So Important For Investment Advisors?
Financial planners are tasked with a variety of responsibilities. They are in charge of assessing and manage the financial affairs of their clients, including individuals and organizations. They help them get out of debt, prepare them for future expenses, assist them with planning for their retirement, handle tax-related concerns, and assist with investment planning, among other important tasks.
When it comes to handling someone else's finances, there's a lot at stake and there's very little room for error. Your clients expect you to make the best decisions possible; but, errors and oversights can happen. If they do, you could end up facing lawsuits, penalties, and various other expenses that could potentially ruin your business and your personal assets. Furthermore, damages to your property and the property of others, third-party injuries, and employee injuries are additionally risks that you may have to deal with.
By carrying the right type of Rhode Island financial planner insurance coverage, you can protect yourself from these risks and avoid paying exorbitant expenses out of your own pocket. In other words, insurance coverage helps to protect you from severe financial strain that could potentially cripple your business and your personal life.
What Type Of Insurance Should Financial Planners Invest In?
In order to properly protect your financial planning business, having the right type of Rhode Island financial planner insurance coverage for each of the risks that you face is crucial. The risks that financial planners face will vary and depend on a variety of factors, such as the clients the work with, the specific services they provide, and where their RI business is located.
No matter what the specifics of your business may be, every financial planner should carry the following insurance coverage:
- Commercial General Liability - What happens if a client, a vendor, or some other third-party individual suffers an injury on the premises of your business? What would you do if someone filed a lawsuit against you, claiming that you damaged their property? With commercial general liability insurance, you won't have to worry about the costs that are associated with such incidents, as your insurance provider will handle them for you. For instance, if someone trips over something while visiting your office, breaks a leg, and files a lawsuit, your commercial general liability insurance would cover any related medical costs, as well as legal fees and any damages that may be awarded.
- Professional Liability - Also referred to as errors and omissions (E&O) insurance, this type of coverage provides protection against any claims that a client may make regarding the services that you have provided. For instance, a client could sue you for making an error on their taxes or for making poor investment choices. With professional liability insurance, the costs of legal defense fees, as well as any damages that may be awarded, will be covered.
- Cyber Liability - Having a cyber liability insurance policy is also a good idea for financial planners. If someone hacks into your accounts, steals a clients information and identity, or does anything else that could cause harm by using the information obtained by hacking into your system, cyber liability insurance will cover any damages and legal fees.
- Workers' Compensation - If you employ a staff, you are responsible for protecting them from any work-related hazards that they may be exposed to. Workers' comp will pay for any medical care and lost wages if an employee suffers a work-related injury or illness.
RI Financial Planner's Risks & Exposures
Premises liability exposure is often minimal since much of the client contact is done electronically or by mail. If clients visit the premises, they must be confined to designated areas to prevent them from overhearing conversations regarding other clients' confidential information. To prevent slips, trips, and falls, all areas accessible to clients should be well lighted with floor coverings in good condition. The number of exits must be sufficient, and be well marked, with backup lighting in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. Off-premises exposures arise from sales visits, training sessions, and similar work at the customer's premises. There should be policies and training as to off-site conduct by employees.
Professional liability exposures are extensive. Working with individual clients presents fewer professional exposures than working with corporate clients. The exposure increases if the planner fails to conduct thorough background checks to verify employees' credentials and education, if clerical workers are allowed to do tasks that only professionals should handle, or if error checking procedures are ignored or are inadequate.
All employees must be appropriately certified for the financial planning provided. If financial products are sold, the appropriate licenses must be in place. All advice given must be documented. Very serious losses may result from failure to document decisions and actions or to secure client approval.
Workers compensation exposures are generally limited to those of an office. Since work is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations. Some financial planners travel extensively off site for sales presentations and similar activities. Workers can be injured by slips and falls at clients' premises or in automobile accidents.
Property exposure is generally limited to that of an office, although there may be some incidental storage or an area for meetings. Ignition sources include electrical wiring, heating, and air conditioning systems, wear, and overheating of equipment. Computers and other electronic equipment may be targets for theft.
Crime exposure is from employee dishonesty, which can be quite serious as financial planners routinely have access to their clients' personal financial information, such as banking and investment accounts. Potential for theft, directly or by means of identity theft, is great. Hazards increase without proper background checks, along with monitoring procedures and securing of all records to prevent unauthorized access.
All job duties, such as ordering, billing and disbursing should be separate and reconciled on a regular basis. Receipts should be issued for any cash payments received. Bank deposits should be made on a timely basis to limit the buildup of cash on premises. Audits should be performed at least annually.
Inland marine exposures consist of accounts receivable if the firm offers credit, computers, and valuable papers and records for customers' and vendors' information. Clients' records and approvals are typically originals that are difficult to re-create. Power failure and power surges are potentially severe hazards. A morale hazard may be indicated if the insured does not keep valuable papers and disks in fireproof file cabinets to protect them from smoke, water, and fire. Duplicates should be kept off-site to allow for re-creation in the event of a loss.
Business auto exposure is generally limited to hired and non-owned. If vehicles are provided to employees, there should be written procedures in place regarding personal use by employees and their family members. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained, and records kept in a central location.
Financial Planner Insurance
To find exactly what type of Rhode Island financial planner insurance you need to carry and how much coverage you should invest in, speak with an experienced insurance agent.
Rhode Island Economic Data, Regulations And Limits On Commercial Insurance
If you are considering starting a business, it's important that you choose the right location for your operation. Ensuring that the area offers the right market and demographics that will benefit from and be interest in the goods and/or products that your business intends on providing are vital for your success.
If you are thinking about starting a new company in Rhode Island or would like to expand the operations of an existing company into the state, it's crucial that you ensure the state offers a healthy climate that will allow your business to reap as much success as possible.
By assessing the employment rate of a state, as well as the key business sectors that are thriving there, you can determine if Rhode Island is a practical location for your company. Additionally, to ensure that you are in compliance with the law, it's imperative that you are aware of the commercial insurance coverage that business owners are required to carry in the state.
Below, we offer an overview of the economic trends and commercial insurance requirements in the Plantation State so you can determine if it will be a good location for your business.
Economic Trends For Business Owners In Rhode Island
As of December, 2019, the Bureau of Labor Statistics reported that the unemployment rate in the state of Rhode Island was 3.5%, which was on-par with the national average, which was also 3.5% at the same time.
Economists credit favorable taxes, the close proximity to regional markets, and the diverse workforce for the state's health economy.
In regard to locations within the state that offer the best opportunities in the Ocean State, urban areas are ideal. This includes:
The suburban regions that surround the state's metropolitan areas also offer favorable conditions for businesses.
Businesses of varying sizes and in a variety of industries are thriving in RI. At the time of writing, the sectors that are seeing the most activity in Rhode Island include:
- Financial services
- Health care
- Hospitality and tourism
- Professional services
Commercial Insurance Requirements In Rhode Island
The Rhode Island Division of Insurance Regulation regulates insurance in RI. Rhode Island mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Rhode Island requires you to have worker's compensation insurance if you have four or more employees on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Rhode Island also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
Additional Resources For Professional Services Insurance
Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.
- Answering Service
- Armored Car
- Attorney Lawyer
- Background Music Services
- Business Consulting
- Chemical Engineers
- Civil Engineers
- Claims Adjuster
- Commercial Laundries
- Commodity Broker
- Corporate Wellness
- Court Reporter
- Credit Bureaus
- Debt Collection Agency
- Detective Agency
- Diaper Services
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Planner
- Financial Services
- Funeral Directors
- HR Consultant
- Inspection Bureaus
- Insurance Agents & Brokers Insurance
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Piano Tuners
- Project Management
- Safety Consultants
- Speakers Bureaus
- Temporary Staffing
- Tax Preparer
- Title Abstractors
- Valet Parking
Let's face reality. People today are claims conscious, resulting in a significant share of malpractice lawsuits against professionals.
Liability resulting from the rendering of or the failure to render professional services is excluded in most liability coverage forms. This means that a policy covering a account's or lawyers' office will cover liability arising out of the maintenance or use of the premises, but specifically exclude liability arising out of the rendering of a professional service or the omission of such a service.
In addition to the professions in which actual physical or mental injury may be caused to clients, certain other professions are exposed to claims for malpractice.
Claims may be brought against lawyers, accountants, architects, and similar professional persons for errors or omissions in their professional capacity. Errors & Omissions insurance pays damages that might be awarded to a plaintiff alleging professional negligence.
Professional liability policies are made available to such risks, and these policies provide essentially the same protection as is afforded under the physicians, surgeons or dentists professional liability policy.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.
Request a free Rhode Island Financial Planner insurance quote in Barrington, Bristol, Burrillville, Central Falls, Charlestown, Coventry, Cranston, Cumberland, East Greenwich, East Providence, Exeter, Foster, Glocester, Hopkinton, Jamestown, Johnston, Lincoln, Little Compton, Middletown, Narragansett, New Shoreham, Newport, North Kingstown, North Providence, North Smithfield, Pawtucket, Portsmouth, Providence, Richmond, Scituate, Smithfield, South Kingstown, Tiverton, Warren, Warwick, West Greenwich, West Warwick, Westerly, Woonsocket and all other RI cities & Rhode Island counties near me in The Ocean State.
Also find Rhode Island insurance agents & brokers, RI local small businesses by General Liability Class Code and learn about Rhode Island small business insurance requirements for general liability, business property, commercial auto & workers compensation including RI business insurance costs. Call us (401) 371-8771.