Stockbrokers Insurance Louisiana

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Stockbrokers Insurance Louisiana Policy Information

LA Stockbrokers Insurance

Stockbrokers Insurance Louisiana. Whether you're an independent stockbroker or you operate a brokerage firm, your job is to assess stocks, provide your clients with valuable insight, and help them make the best financial decisions; a pretty monumental task, to say the least.

From encouraging purchases in stocks that are showing promise to persuading the sale of shares in companies that have a questionable outlook, the advice you provide has a substantial impact on the monetary future of the people you serve.

Stockbrokers are trained and licensed to purchase and sell stocks, bonds, commodities, and other securities for their individual or corporate clients on a fee or commission basis. A security is a document proving ownership of stocks, bonds, or futures.

Stock represents a piece of ownership in a corporation, while a bond refers to the purchase of corporate debt, such as a bond issued to finance the expansion of a business. Commodities are unprocessed materials, such as grain, livestock, or metals, that are traded on futures markets. Stockbrokers function only as agents (intermediaries between buyers and sellers), whereas investment bankers buy on their own account and may also function as agents.

Either may recommend and advise purchases and sales to their clients. Stockbrokers are regulated under the jurisdiction of the Federal Securities and Exchange Commission. Stockbrokers have a high degree of fiduciary responsibility to their clients.

While you do your best to stay current with the market and abreast of the exchange, no matter how much knowledge and experience you have, there are no guarantees. Unless you have a crystal ball, there's no surefire way to predict what will happen in the future with 100% certainty and a single mistake could end up being partly to blame for substantial financial losses.

Of course, if you operate a firm, you're also responsible for ensuring the safety and well-being of the brokers you employ, as well as anyone who enters your business. If anything happens to the physical structure of your commercial property, you're responsible for that, too.

That's a lot of financial responsibility. How do you protect yourself from liabilities? By investing in the right type of stockbrokers insurance Louisiana, of course!

Stockbrokers insurance Louisiana protects your firm with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.

Why Do Stockbrokers Need Insurance?

As mentioned above, if you're an independent LA stockbroker or you operate a brokerage firm, you may be held liable for any financial mishaps that may occur. For instance, if you encourage a client to sell shares and it turns out that the company ends up seeing huge gains, that client could be thousands - if not millions - of dollars. Based on your advice, he or she could blame you for those losses and take legal action.

If you're the owner of a firm, there's a chance that one of your employees could suffer a work-related injury or a third-party files a lawsuit against you for property damages or personal injuries. If something were to happen to the physical structure of your firm - a fire or an act of vandalism, for example - your commercial property and the contents within it could be damaged or stolen.

In any of the above-mentioned scenarios, you could be looking at costly legal fees and settlements or medical and repair bills. Paying for those expenses out of your own pocket could end up putting you in financial ruin.

With the right type of stockbrokers insurance Louisiana coverage, however, your carrier would cover the expenses for you. In other words, insurance can help protect you from significant financial losses.

What Type Of Insurance Coverage Do Stockbrokers Need?

The specific type of stockbrokers insurance Louisiana coverage you'll need depends on several factors, such as where you're located in LA, whether you're an independent broker or you operate a brokerage firm, and the size of your operation.

With that said, there are certain types of insurance coverage that all stockbrokers should carry, examples of which include:

  • Professional Liability - If you make a mistake or an oversight and a client files a lawsuit against you, professional liability (also known as errors and omissions or E&O) coverage will help to pay for your legal expenses due to negligence and any settlements that you may be required to pay.
  • General Liability - This policy covers third-party injury and property damage claims. If a client were to slip and fall on your property and sue you, this policy would cover your legal expenses and compensation you may be responsible for.
  • Cyber Liability - Viruses, hackers, and data breaches can end up compromising client information and cause serious financial losses. Cyber liability protects you from the expenses that are related to any cyber-related issues that may occur.
  • Commercial Property - This policy protects the physical structure of your business as well as the contents within it from acts of nature (fires, pipe bursts, etc.), vandalism, and theft. It will help to repair or replace anything that is damaged in these types of incidents.
  • Workers' Compensation - If employ a staff, you're responsible for providing them with a safe work environment. If someone suffers an on-the-job injury or develops a work-related illness, this policy will cover their medical care and compensate them for any lost wages, too.

These are just a few examples of the types of stockbrokers insurance Louisiana coverage that should be considered.

Louisiana Stockbrokers' Risks & Exposures

Premises liability exposure is often minimal since most 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 seeing other clients' confidential information or from hearing private conversations.

To prevent slips, trips, or falls, all areas accessible to customers 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 stockbroker fails to conduct thorough background checks to verify employees' credentials, education, and licensing, ignores or has inadequate error checking procedures, or allows clerical workers to do tasks that only professionals should handle such as putting in orders or offering investment advice.

Firms that perform their own analyses, or prepare prospectuses for new offerings, present a higher risk than those that simply provide access to analyses done by others. The handling and sharing of information not generally available to the public is a serious exposure, sometimes resulting in allegations of insider trading. Ongoing training must be required for all employees.

Policy and procedure manuals should be updated regularly. Very serious losses may result from failure to document decisions and actions or to secure client approval. All employees must be supervised and monitored, and MUST take at least one consecutive week of vacation a year.

Property exposures are 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 stockbrokers frequently have access to their clients' personal and proprietary information, including 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. All transactions should be handled in accordance with SEC guidelines.

Inland marine exposures consist of accounts receivable if the stockbroker 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 stockbroker 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.

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 stockbrokers travel extensively for sales presentations and similar activities. Workers can be injured by slips and falls at clients' premises or in automobile accidents.

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.

Stockbrokers Insurance Louisiana - The Bottom Line

For more information about the type of coverage to consider, as well as how much stockbrokers insurance Louisiana coverage you'll need, speak with an insurance broker that specializes in commercial insurance.

Louisiana Economic Data, Regulations And Limits On Commercial Insurance

Made In Louisiana

If you are a business-minded individual who is either thinking about starting a new business or who wants to expand an existing business by opening a division in a new state, it's important to choose a location that offers favorable conditions.

In business, it doesn't matter how high-quality the products and services you offer are, if the products and services don't appeal to the market, you likely aren't going to succeed. With that said, if you are interested in starting a business in the state of Louisiana, having a basic understanding of the economic trends is important.

It's also a good idea to know what type of insurance you'll need to carry, as certain commercial policies are compulsory in the state.

Below, we provide an overview of economic trends of the Creole State to determine if it's the right location for your operation.

Economic Trends For Business Owners In Louisiana

Unemployment rate is a good indicator of a state's economy. The lower the unemployment rate, the more advantageous the environment will be for prospective business owners. Unfortunately, the unemployment rate of Louisiana is higher than the national average; as of December, 2019, the rate was 4.9%, which was 1.5% higher than the national average of 3.5% at the same time.

Additionally, the unemployment rate has increased; it was 4.3% in July of 2019, 4.5% in October, and 4.7% in November of the same year. However, despite this, the unemployment rate has decreased in recent years, which does show promise for entrepreneurs who are thinking about starting a business in the state.

The best spots to start a business in LA are large cities and the suburban areas that surround them. The following cities have seen the most significant industrial growth:

  • Baton Rouge
  • Lafayette
  • Lake Charles
  • New Orleans
  • Shreveport

Businesses in various industries do well in the state of Louisiana; however, there are specific sectors that are seeing substantial growth. Those industries include:

  • Advanced manufacturing
  • Aerospace
  • Agribusiness
  • Automotive
  • Commercial fishing
  • Crude oil
  • Energy
  • Entertainment
  • Natural gas production
  • Software development
  • Water management
Commercial Insurance Requirements In Louisiana

The Louisiana Department of Insurance regulates insurance in LA. Louisiana mandates very few forms of insurance coverage by law. They enforce worker's compensation.

Louisiana requires you to have worker's compensation insurance if you hire even one employee on a regular basis or must be approved for self-insurance. 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.

Louisiana 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.


Professional Services Insurance

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.


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Also find Louisiana insurance agents & brokers and learn about Louisiana small business insurance requirements for general liability, business property, commercial auto & workers compensation including LA business insurance costs. Call us (318) 232-4100.

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