Financial Adviser insurance – cost and types of policies

Whenever you budget the expenses of your business, Financial Adviser insurance must be included in the list because you can’t always know exactly what could happen in the future.

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With the protection provided by liability insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Financial Adviser enterprise, you must consider how much financial liability you are taking on.

If your Financial Adviser business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions. 

Financial Adviser Insurance

In this article, we are giving very general guidelines for startup businesses to highlight what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Financial Adviser business?

What this means, for any Financial Adviser business owner, is that if some customer claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Financial Adviser business is not sheltered by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have claimed.

When you are running your Financial Adviser operations, you can’t escape responsibility for the results of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does Financial Adviser insurance protect you from?

For your Financial Adviser business, the most important sorts of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also there are some official kinds of insurance that various states require.

In the next few paragraphs, we will describe the most important points any Financial Adviser business owner should know when negotiating the insurance needed.

The main categories of insurance for your Financial Adviser businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Financial Adviser business is dealing directly with customers, and that means you generally have the danger that some accident can happen to them bodily or else something of theirs can be ruined.

In such a case, they can sue you for compensation.

General liability insurance policy for your Financial Adviser business insures you against claims coming from injury to customers or damage to their property.

It protects your Financial Adviser business from the claims themselves and as well to any follow-on court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your Financial Adviser business would be with a boundary of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Financial Adviser insurance operations.

Professional liability insurance for your Financial Adviser business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Financial Adviser business for them, you can quickly face a court case.

Even if the case against you is ruled in your favor, the cost of defense can be high, and the impact on your reputation can be damaging.

Most small Financial Adviser business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of Financial Adviser insurance section below for average prices of professional liability insurance for your Financial Adviser operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that the results didn’t meet your description of function, or that your advice was basically incorrect.

You need to know the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for results caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Financial Adviser

Only you can determine exactly how much insurance you should get.

Best advice is to consult with experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Financial Adviser business

Take care! – practically all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the car is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a proper commercial vehicle insurance package.

Commercial van policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your truck is involved in a crash.

Most states, other than Virginia and New Hampshire, require this type of insurance.

The necessary value of the insurance depends on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Financial Adviser business needs unique and expensive equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The gear may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can wipe-out your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you need full-level equipment insurance so that you can immediately buy everything needed to keep your Financial Adviser business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Financial Adviser business’ equipment.

Commercial Property insurance

Any Financial Adviser business that owns or rents space in a building must have a commercial property insurance policy.

If you own the property, you may already have a substantial capital investment, as well as a big liability if there’s a mortgage.

Any physical building location should carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your Financial Adviser business deals in areas of high risk, like Florida or South Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of Financial Adviser business premises, there is a need for more supplementary cover than in warmer climes.

Because the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Financial Adviser insurance section below to give some idea of the average prices per million dollars of property insurance for your Financial Adviser business.

Temporary insurance by month, week or day for your Financial Adviser business

Is your Financial Adviser business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Financial Adviser – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having the same risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Financial Adviser business

You have the option to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP integrates commercial property and public liability insurance by incorporating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Financial Adviser businesses, such as yours.

There are some limits that will determine whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle policies.

Also, the size of your business will rule whether you are permitted to take out BOP cover.

The normal business that is allowed to take a BOP policy must have less than one hundred employees, and maximum five million dollars in annual revenue.

As well, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Financial Adviser business employees

In almost all states, it is mandatory to have workers compensation insurance when your Financial Adviser business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you may not get your workers compensation obligations from private insurance corporations.

Workers compensation charges are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every Financial Adviser insurance requirement is unique, there are enough examples of average quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your Financial Adviser businesses needs.

Types of insurance Price range
Equipment insurance $477 – $1449
Product liability insurance $269 – $594
Commercial insurance $818 – $2355
Commercial vehicle insurance $1908 – $3062
General liability insurance $777 – $837
Public liability insurance $337 – $655

Cost of insurance for your Financial Adviser operations depends on many different factors.

We have calculated these figures for small freelance Financial Adviser businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like New Mexico, they will be about 20%-30% cheaper.

The location and size and type of your Financial Adviser business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another good source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Financial Adviser operations?

This is a wide term used to describe standard insurance policies designed to protect Financial Adviser business owners from risks like bodily injury, property damage, claims of negligence.

Does my Financial Adviser business have to have insurance?

Some of the types of insurance are not mandatory for you to run your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Financial Adviser business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the best policies for Financial Adviser insurance.

How much will Financial Adviser business insurance cost?

As well as the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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