Frequently Asked Questions About
Commercial General Liability Insurance
How much does small business insurance cost?
Costs can vary widely based on industry and are also determined by zip code and often payroll and/or gross sales. Request a free quote to get an exact number. (read more)
What kind of business insurance do I need?
Most business owners need General Liability Insurance at the very least. If you have any non-owner employees, you will need workers compensation insurance too.
What is a Certificate of Insurance?
A Certificate of Insurance is proof of coverage. It lists the type and amount of liability coverage you have and other policy information when a third party requests it. (read more)
Is business insurance tax deductible?
Yes. you can deduct the cost of commercial insurance premiums. The IRS considers insurance a cost of doing business as long it benefits the business & serves a business purpose.
Financial Planner Insurance
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 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 financial planner insurance so that you can ensure your business is properly protected.
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 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 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 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.
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 financial planner insurance you need to carry and how much coverage you should invest in, speak with an experienced insurance agent.
Small Business Economic Data & Insurance Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. Maybe you want to contribute to the economic growth of your community. Whatever the reason is, if you're thinking about starting a small business, it's important to understand pertinent information relating to small businesses in the United States; namely economic information and insurance regulations. After all, if you want your small business to succeed, you have to understand the economic trends organizations of a similar size in your area.
Likewise, you want to ensure that your small business is well protected with the right business insurance and that you are in compliance with the rules and regulations that pertain to commercial insurance in your region.
Read up on economic statistics and insurance information that relates to small business owners in the United States.
Small Business Economic Data In The United States
Here's a look at some information that was compiled by the Small Business Association (SBA) regarding the economic data that pertains to small businesses in the United States:
- In 2015, small businesses in the United States employed an estimated 58.9 million American workers, or 47.5 percent of the nation's private workforce.
- Largest shares = fewer than 100 employees. The small businesses that employed 100 people or less had the largest share of employment amount small businesses.
- Employment increased by nearly 2 percent. In 2018, employment amongst small businesses increased by 1.8 percent, which is an increase of 1 percent from the prior year.
- Increase in proprietors. In 2016, the number of small business proprietors increased by 2.3 percent.
- In 2015, small businesses were responsible for creating 1.9 million net jobs. Organizations that employed 20 people or less had the largest gains, as they added an estimated 1.1 million net jobs.
- There were 5.7 million loans that were value less than $100,000 issued by lenders in the United States in 2016. These loans were issued under the Community Reinvestment Act.
- Small business owners that were self-employed at the incorporated businesses that they owned reported a median income of $50,347 in 2016.
- Small business owners that were self-employed at the unincorporated businesses that they owned reported a median income of $23,060 in 2016.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage. The SBA recommends the following insurance plans for small business owners:
- Commercial Property Insurance: In the case of an unplanned disaster - fire, flood, vandalism, theft, etc. - this type of coverage will help you avoid paying for the damage out of your own pocket. Even if you rent the property, you should still carry commercial property insurance.
- Commercial Liability Insurance: In the event that a legal situation arises - a negligence lawsuit, for example - commercial liability coverage will provide financial protection. It will cover the cost of legal defense fees, court fees, and even moneys that may be awarded.
- Commercial Auto Insurance: If you operate a vehicle for any activities that are related to your business - transporting and/or delivering goods, or meeting with clients - commercial auto insurance is legally required for businesses of all sizes, including small businesses.
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
- Attorney Lawyer
- Business Consulting
- Corporate Wellness
- Court Reporter
- Debt Collection Agency
- Detective Agency
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Services
- Financial Planner
- HR Consultant
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Project Management
- Temporary Staffing
- Tax Preparer
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.
Quotes from leading small business insurance carriers including: ACE, AmTrust, Chubb, Cincinnati, CNA, Colony, Employers, Evanston, Fireman's, Foremost, Guard, Hanover, Hiscox, Liberty Mutual, LLoyd's of London, Markel, MSA, Nationwide, Penn America, Philadelphia, Prime, Progressive, Scottsdale, The Hartford, Travelers, USLI, Utica First, Western World, Zurich & others.