People or businesses that provide professional services are
held to a higher standard of care; this is often why you and your business must
be licensed to provide these services. Errors & Omissions (E&O) or, Professional
Liability insurance covers actual or alleged errors, omissions or negligent
acts that occur in the rendering of professional services to clients.
HUB HKMB’s program provides Corporate E&O coverage for
‘Financial Services’ firms or companies that provide Licensed Life,
A&S, Segregated or Mutual funds, or Securities Registered professional
services. This coverage is in addition to E&O coverage you carry as an
individual licensed advisor.
The need for Corporate E&O is based in exposure, and
regulatory requirements. Some Provincial Regulators require a Life Licensed
company to have coverage of its own or dedicated limits for the company under
a separate E&O policy. Check with the regulators in the province(s) in
which your company is licensed.
In recent years, the risk for this exposure has increased,
with more claims that name a company (vs the individual) directly.
If there is no E&O insurance in place for the company,
the cost of defending and settling a claim becomes a company expense, or comes
out of the Principal’s pocket. Even if a claim is groundless, a defence must be
provided. Defence costs can be the most expensive part of a claim.