Finance and Legal Insurance: A Comprehensive Guide
The finance and legal industry is a lucrative one, but it can also be complicated. The laws change often, and what was once allowed may not be anymore. For this reason, we’ve created a comprehensive guide on the basics of finance and legal insurance to help you get started in your business venture!
At times, it can be challenging to know what type of insurance coverage will best suit your needs. This is especially true when you are looking for legal and financial protection. You may not realize that there are many different policies available, and each one offers a unique set of features and benefits. The right policy could provide the peace of mind you need to get on with your life without worrying about potential risks or fallout from an unfortunate event.
Who Needs Finance and Legal Insurance?
You should consider finance and legal insurance if you work in the financial or legal industry. For example, a lawyer may need to have errors and omissions coverage to pay for defence costs if they are sued. An accountant might want malpractice protection if an error is made while doing the taxes that cause them to lose money on a refund from the relevant tax authorities.
If your business deals with any type of risk where lawsuits could be filed, getting appropriate coverage will help protect you financially when something goes wrong. Finance and legal professionals generally fall into one or more categories: attorneys, accountants, auditors, consultants, bankers, brokers/dealers (securities), real estate agents/brokers, trust officers/officers of banks holding others’ assets, and escrow agents/officers of banks holding others’ assets.
What Types of Coverage Are Available?
Let’s take a look at the different types of coverage available for finance and legal professionals:
Professional Liability Insurance
Professional Liability Insurance (also often referred to as errors & omissions insurance) pays for your defence costs if you are sued in one or more areas where you provide professional advice such as accountants, lawyers, real estate brokers /agents, consultants, etc.
It also covers damages awarded against the policyholder stemming from any claims that arise out of providing financial services, including but not limited to audits, tax preparation, bookkeeping, rendering opinions on investments securities, among other things.
2. Employment Practices Liability Insurance
Employment Practices Liability Insurance helps pay your defence costs if you are sued for actions involving the workplace such as wrongful termination, sexual harassment, failure to promote or hire someone due to bias, among other things. It also covers damages resulting from claims that stem out of policies and procedures set forth by your company.
3. General Liability Insurance
General Liability Insurance helps pay for defence costs related to bodily injury, property damage, and personal/advertising injury liability stemming from lawsuits against policyholders’ businesses, including those in finance. For example: if a client slips on the water at an event where they were served food or drink by one of your catering employees, this coverage will help pay their medical expenses and legal fees associated with bringing suit against you.
Your business might want additional types of insurance depending on its line of work. For example, a business that needs to transport goods may have cargo insurance, product liability coverage or employer’s liability and workers’ compensation. If you’re not sure what type of policy is right for your company, it’s always a good idea to talk with an agent.
Benefits of Finance and Legal Insurance
Finance and legal insurance can be a treasured addition to your business or practice because it protects you financially when something goes wrong. Let’s say, for example, that a client sues you because the IRS reduced their tax refund due to errors made on their return which they blame on you. Without adequate professional liability coverage, this could potentially put your entire business at risk.
However, having finance and legal insurance in place will help protect your business from significant losses that stem from lawsuits by clients seeking damages against them and other costs associated with being sued, including fees charged by defence counsel, among others. It also provides peace of mind knowing if anything does happen while protecting yourself legally, so nothing stops you from focusing 100% on your business.
How to Find the Right Insurance Provider for Your Business?
Getting the right finance and legal insurance for your situation can be tricky, but fortunately, there are resources out there that help point you in the right direction. An excellent place to start is by asking other professionals they use and checking individual states bar association websites that often list carriers.
It would help if you also considered word of mouth recommendations from trusted sources, including peers, clients, colleagues, among others who have used a particular provider before, so they know what to expect when filing claims or dealing with their insurer. Keep in mind it may take some time to find the best carrier(s) for your line of work, so don’t give up if things don’t go well after several tries. This is especially true if you need to switch providers because your current one can no longer service the needs of your business.
Find out more about the importance of insurance here.
Other useful links about business insurance:
Arts & Entertainment Insurance
Business Building Insurance
Architect & Surveyor Insurance
Remember to Compare Your Business Costs is here to help your business every step of the way from business advice, or saving you time and money on your business purchases such as: