Reflection
As a financial-services professional, you’ve worked hard to get where you are today. But your success is no accident. It’s attributable to four key factors:
- First, you set your sights high. Early on, you decided you wished to pursue not just a job, but also a professional career. That means you were willing to acquire a rigorous body of knowledge, to hold yourself to high standards of ethics, and to work hard to make a difference in your clients’ lives.
- Second, you have always believed that your actions convey not only your professionalism, but also the standing of your industry. Which means you recognized that doing something that hurts your clients affects two parties: your customers and your industry. For this reason, because of your professionalism, you’ve attempted to speak and act in appropriate ways at all times.
- Third, you’ve tried to always take the long view of success. This means evaluating potential decisions not only as ways to make money in the short term, but also as a pathway to achieving a sustainable success. Because of this, you may have walked away from short-run opportunities to enrich yourself that might ultimately put you on a weaker financial and/or ethical footing later on.
- Fourth and finally, you’ve viewed your professionalism as something that’s precious, priceless, and difficult to repair once tarnished. As with the third reason, this attitude has helped you to avoid actions or words that could undermine the years of work you’ve put into becoming a successful professional in financial services.
Despite these factors, people are human. Which means they are susceptible to doing the wrong thing or forgetting to do something, either of which can financially harm their customers. These so-called errors & omissions can unravel years of hard work, leading to devastating legal judgments, tarnished professional reputations, and failed businesses. The key word here is “can.” That’s because by taking proper steps, you can prevent these negative consequences from ever happening. But first, you must realize that errors & omissions insurance can safeguard your professional life.
Avoiding
The key is avoidance. Take steps ahead of time to protect your business with E&O insurance. Don’t assume you’ll never make a mistake. Don’t expect your clients to always love you. Don’t think your professionalism and charm will immunize you against lawsuits. These are all comforting notions, but in the cold light of day, they are illusions.
Despite your best intentions and hard work, you can get sued and the impact of losing in court can change your life forever. And don’t forget. If you have a family, short-circuiting your ability to earn a living in your chosen career can affect not only you but also your spouse and/or children. Given how much is at stake, avoiding the financial devastation of E&O disputes is an essential step in protecting your financial future.
Covering
“Covering for you” is an apt way to think about your E&O insurance. We don’t mean this in the sense of lying for you or helping you pull a fast one on your clients. What we mean is covering your business with a blanket of security that repels external attacks and keeps you and the people you care about safe. This is what E&O insurance—professional liability insurance—is designed to deliver.
E&O insurance starts by providing the cash needed to retain an attorney on your behalf. Many financial professionals think they can settle client claims on their own. But as the old saying goes, “Anyone who tries to defend him or herself in court has a fool for an attorney.” With so much at stake, it’s important for financial professionals to have an astute legal advisor by their side to defend their rights in court. If they were wise enough to purchase E&O insurance, their E&O insurer would quickly refer them to a skilled attorney and then pay that individual’s fees, from the beginning of the case all the way through to its final resolution.
What’s more, E&O insurers will also assign a claims adjuster to your case in order to manage all the details involved in investigating the plaintiff’s allegations and in shepherding the case through the legal process. E&O insurance also provides coverage for ancillary charges such as expert-witness fees, office expenses, and arbitration or mediation costs.
But the most important benefit of having E&O insurance is this: If you lose in court and the judge orders you to pay damages to the plaintiff, then your insurer—not you—is responsible for making that payment. As we’ve said many times in the past, depending on the nature of your business, E&O judgments can range from tens of thousands of dollars to hundreds of thousands. Unless you are independently wealthy, you will not want to self-insure an expense that large. It can literally destroy your business and wipe out your life’s savings.
At the end of the day, being a professional involves all the things we mentioned earlier, but also one final thing. It demands an ability to envision not only the fruits of a successful business but also potential negative outcomes in the future. The ability to think one step ahead—and to make sensible preparations for harmful contingencies—may well be the most professional trait of all.
For more information about securing E&O insurance for your business, visit EOforLess.com today for more information.