Professional Liability Insurance for Estate Planners

Professional Liability Insurance for Estate Planners

Table of Contents

Estate planners need the protections of Errors and Omissions insurance. This valuable coverage is vital to the success and viability of your estate planning business over the long run. Now, it is assumed that most every estate planner is trying their very best to give good advice and to set up plans that deliver on the promises. When it comes to estate planning there is some information that is based on assumptions. For instance, estate planners have to look into the future and estimate what kind of average growth to expect. Sometimes that growth does not materialize. That is easily demonstrated as a hazard of investing and not negligence.

Negligence in the field of estate planning is the lack of reasonable care in the handling of a person’s estate. That does not mean that an estate planner has to accurately predict the future. They are trained to measure the goals of their customer against the reasonable goals of investing and form a plan to reach certain goals in the future. Now, you could invest in something that has held steady for years yet something unforeseeable happens and it becomes more volatile. No court in the country is going to expect any estate planner to have supernatural view of the future. This does not stop an unsatisfied client from filing a claim against an estate planner though.

Filing a Claim

If a customer of an estate planner feels that the planner was negligent they can file for relief in a court of law. This is where an estate planner’s Errors and Omissions policy would come into play. The claim would be filed against the planner and against the insurance company. The insurance company would take the lead in fighting the case. It is their money on the line so you can be sure they are going to actively investigate and fight any legal claims against them.

There is a case to be made that professional liability insurance is important to financial service providers not only because of the nature of their business but the sheer cost of the legal angle might make any financial services company unable to compete without that vital coverage. Just the cost of legal representation in lawsuits with no merit can be significant. Let the professional legal team working inside experience insurance companies do the work for you. The courts will eventually weed out cases without merit but paying an attorney to work the cause up to that point is still a hefty expense.

Predicting the Future

If everyone could hire a psychic with a proven track record of financial planning success we would all retire with ease. The truth is, we all have to hire the best planner we can find with a demonstrable record of success, education, training, and they must have the professional liability insurance in place to cover any error or omission they make. Any smart financial planner is not going to have to be told twice why this coverage is so important.

When you meet with a financial or estate planner they are going to want to know how you are confronting risks to your present and future wealth. Your answer will likely be that you are using insurance to confront many of those risks. It is no different for any professional that advises clients on investing and saving strategies to meet financial goals. Once you find a planner with a healthy professional liability insurance for estate planners policy and a good record, you know that this planner understands risks and risk management strategies.