Cost of Errors and Omissions Insurance?
My wife and I are in central Virginia and are starting up a financial counseling business. We are offering advice only; therefore, we are not selling any financial products. Initially, we are going to do it on an appointment only basis and then once the company grows, get a storefront and do it full time. We have been professionally trained, but are not "Certified Financial Planners."
I am wondering what a ballpark figure would be for the errors and omissions insurance in our situation. I understand that the policy will vary by what is included and the specifics, but I'm just looking for a general figure. Thanks!
We are *not* billing ourselves as Certified Financial Planners. We are selling our time and advice only (basically, helping people set up budgets, work through debt [not consolidation services], build a healthy financial strategy for life, etc.). There is no license available that we can obtain for what we are going to do.
We also will not be recommending specific investments. We may recommend *types* of investments (e.g., growth stock mutual funds), but will not recommend any specific company nor sell any investment.
I very much appreciate your input and insight! If my additional details modify your answer, please modify your answer. Thanks!
Let me reitterate. We *will not* recommend specific stocks nor will sell any type of financial product - ever. Our goal is not to sell products, but to counsel people on how to handle their money in general. If they wish to purchase financial products, we will recommend an investment broker.
- AnonymousLv 71 decade agoFavorite Answer
It would start at $2500, but you'll need to have GL coverage in place. Also, you'll need to be properly licensed in your state for what you are doing.Source(s): agent, 21+ years
- 1 decade ago
If you are going to go through all the work of counseling people and getting them on the road to financial success why wouldn't you start your own firm and help with the implementation of the plan. That is like going to a dentist who is like yes you have a cavity, you better go see a dentist and get that out. People will be confused. Also if you are charging money for budgeting and financial recommendations, no matter how general they are you are going to fall under Rule SEC 202. Read it
- Mr. PrefectLv 61 decade ago
You must have some type of license, or else, even if you both know what you are doing, there will be someone out there that will at some point be unhappy with your recommendations, and sue.
People will be asking for actual recommendations, be it stocks, bonds, etc. and you will need a securities license to sell, also, how you will package generalities will be most interesting.
- aaron pLv 51 decade ago
MBR's about right, maybe it'll be a little higher. You may need to get your business approved with the state of VA as a Registered Investment Advisor if you are giving any advice that relates to, or might be construed as, investment advice. Check and double-check. With the recent Merril Lynch ruling, you don't want to be on the wrong end of this stick.
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- marwangaLv 44 years ago
it truly is E&O, not ENO. You bypass to the agent that writes something of your agency. How a lot it costs, on your form of threat, is going to be counted upon what percentage investigators/safe practices human beings, and in the journey that they are armed or not, and the position they function, and what form of threat you're searching into or guarding. And the territory of operations, of route. i could wager, on your form of threat, assuming a minimum of four workers, it may commence at $2500.