CA E and O Insurance

Errors and Omissions Insurance ("e & o") is one of the most important policies that financial institutions and advisers should obtain to cover themselves. In CA, e and o insurance protects the business organization, its officers, directors, and employees in the event a client asserts a claim as a result of any mistake or failure to act on the part of the firm or adviser. Errors insurance covers various faults, including but not limited to inaccuracies, miscalculations, oversights, trade errors and legal fees. Omissions coverage pertains to any non-fraudulent failure to act by the firm or individual.

Contrarily, general liability insurance is not the same as CA e & o insurance. General liability insurance does not cover lawsuits resulting from investment mistakes or failures to act. If you are living in CA, e and o insurance coverage also should not be confused with Directors and Officers Insurance ("d & o"). D & o only covers the firm directors and officers from potential lawsuits brought forth by stockholders, employees, clients and other parties for which the directors and officers are responsible.

Below are several examples of how CA e and o insurance may provide protection. CA e and o insurance may provide protection against unauthorized trades, misappropriation, trade errors, breach of fiduciary duty, breach of contract, failure to supervise, and misuse of authority, material inaccuracies, inadequate research and solicitation discrepancies.

It is important to note that CA e and o insurance will cover all of the above mentioned examples so long as the error or omission does not involve a fraudulent violation of industry rules and regulations. It is important to know how CA e and o insurance coverage works. CA e and o insurance coverage has various levels of coverage ranging typically from $500,000 to $2,000,000+ depending on your business model. Similarly, the retention and cost of CA e and o coverage varies. CA e and o insurance providers take into consideration a multitude of factors including, but not limited to, the level of risk your business will assume, number of employees with professional designations and assets under management in discretionary and non-discretionary accounts.

A CA e and o insurance policy is an important safeguard for your business. While there are other forms of insurance that also should be considered dependent upon your business model, CA e and o insurance has a place in every securities business. Though it may not be required by law, CA e and o insurance protects you against mistakes that can happen in any business. It only takes one mistake to potentially lose all of your hard earned money, and possibly even your business! CA e and o insurance rates vary according company, and the amount of coverage you decide to choose. Some company's minimal coverage starts out at less than $10.00 per year with maximum coverage at $200.00 per year. Please visit www.prevotassociates.com and get a quote that will suit the needs of your business. Considering the cost of CA e and o insurance coverage, it is highly risky not to protect yourself.