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Frequently Asked Questions about Professional Liability Insurance

As a financial advisor, you need Professional Liability coverage for the services you provide. From disgruntled clients to fiduciary liability or even typos, the right coverage makes all the difference.

What is the Difference between Professional Liability and E&O?

Professional Liability Insurance and Errors and Omissions Liability Insurance are the same thing. It may also be referred to Malpractice Insurance.

What do Professional Liability Insurance Policies Cover?

Coverage depends on the type of policy you purchase and your profession. However, most policies include coverage for the cost of certain legal fees, and judgments/settlements that you may face as a result of claims and litigation brought against you based on the advice or services you have provided.

What is not Covered?

  • Criminal or intentional acts
  • Liability assumed under contract, with the exception of a written fiduciary contract
  • Insider Trading
  • Alternative Investments, with exceptions for some asset classes
  • Foreign Securities
  • Products not authorized by your broker/dealer
  • Performance Guarantee

Who is covered under Professional Liability policies?

Coverage extends to anyone providing covered Professional Services on behalf of your business. This includes your clerical staff and other employees, independent contractors working for you when the policy starts, and your Chief Compliance Officer.

Does Professional Liability Coverage include Cyber Liability Coverage?

Not typically. You can purchase comprehensive cyber liability coverage separately to cover the exposures of registered advisors. Have questions about Cyber Liability Coverage? Learn more.

Are the services I’ve provided to clients before starting a policy covered?

Often, you can receive coverage for your prior acts by matching your current coverage. However, if you are insured solely through your Broker Dealer, your prior acts coverage could be limited. If you are aware of circumstances that could result in a claim, these should be reported to your current insurer prior to binding coverage.

For more information about finding the right Professional Liability Insurance to fit your needs, visit LocktonAffinity.com or contact us at 844.406.5958.


Coverage may not be available in all states and is subject to actual policy terms and conditions.  Coverage may be provided by an excess/surplus lines insurer which is not licensed by or subject to the supervision of the insurance department of your state of residence. Policy coverage forms and rates may not be subject to regulation by the insurance department of your state of residence. Excess/surplus lines insurers do not generally participate in state guaranty funds and therefore insureds are not protected by such funds in the event of the insurer’s insolvency.