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Fee For Service Only
This insurance policy may only be purchased from Marsh Canada, a licensed insurance broker.
Errors and Omissions
Liability Insurance for Financial Planners whom are not Life, Accident &
Sickness and/ or Mutual Fund Licensed
Item
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Description
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Employers Reinsurance
Corporation (ERC) Policy
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“Claims Made” Policy
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Professional Liability policies are written on a claims made
basis. This means the Policy covers claims actually brought against an
Advisor during the policy term, irrespective of when the error or omission
took place.
It is vital to ensure
that all claims or incidents which may give rise to a claim (i.e. become
known by the Advisor because of a complaint — written or oral — by the client
or discovery by the Advisor of the error) are reported to the insurer during the Policy Period.
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Policy is written on a “Claims Made” form
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Insured Services
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Insured Services are those professional services that are afforded
coverage under a Professional Liability policy.
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Provides coverage for rendering
services you provide for compensation as a licensed Certified Financial
Planner.
“Certified” means having
obtained a CFP designation and be in good standing order with the Financial
Planners Standards Council (FPSC).
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Personal Income Tax Preparation
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Professional Liability
policies can provide coverage for Personal Tax Preparation as it generally
forms part of the professional services of the Named Insured.
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Coverage may be purchased
by endorsement for an additional flat premium of $75.
Provides coverage for the
Named Insured / Personal Income Tax Preparer, but only when using software
approved by the CRA and shall only apply to individuals filing a T1 General
Return.
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Prior Acts Provision
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This is a very important feature to look for when purchasing
Professional Liability coverage. NOTE, It is important to maintain continuous
E&O liability insurance.
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Prior Acts covered.
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Limits of Liability
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Limits of Liability are chosen by the Insured at the inception of
the policy.
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The following liability limit are available:
$1M Per Claim / $2M Annual Aggregate;
$2M Per Claim/ $2M Annual Aggregate;
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Deductible
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The deductible varies for
Professional Liability policies.
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$1,000 deductible option which
applies to damage only.
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Defence and Settlement
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Professional Liability
programs can provide defence costs either within the Limit of Liability or as
an extra dollar amount.
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Policy provides an
additional limit of liability for defence costs, up to the limit of liability
purchased. Should this limit be exhausted, further defence expenses would
reduce the amount available to pay a claim.
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Extended Claim Reporting
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Any Professional
Liability policy should have a provision to allow an insured to purchase
coverage to allow for the reporting of claims after the termination of the
policy.
The extension should
apply to all claims made in the future that have their origin prior to the
termination date of the policy.
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Policy provides the
option of this Extended Reporting Period for RETIRING, DECEASED or DISABLED
Agents, however there is an additional
premium charge.
Options range from 1 to
10 years
Flat Premium – Last
annual
3 years 150%
4 years 175%
5 years 200%
10 years 300%
Termination or
Cancellation - 1 year ERP is available for most Agents @
75% of last annual premium
For more details contact
your Marsh
Canada
representative.
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Territory
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Defines
where cover applies or where suits must be filed
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Policy
provides world wide coverage as long as the claim is made and suit is brought
in Canada or the United States of America*.
*If
you are providing professional services in the US,
you must make arrangements for a separate policy in the US. The intention of this policy is to provide
coverage for Canadian professional services only.
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Named Insured’s
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Named Insured’s are those individuals who are afforded coverage
under a Professional Liability policy.
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Policy covers:
1. The Named Insured
(Policy Holder)
2. Administrative
assistant employees for whose acts the insured advisor is responsible.
3.
Any heir, executor,
administrator, assignee or legal representative of the Insured in the event
of the Insured’s death, incapacity or bankruptcy.
4.
The agency, including a
corporation or partnership under which the Insured is doing business or is
employed but only as respects such corporation’s or partnership’s liability
as it might arise directly out of the Insured’s activities.
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Cancellation
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Many
Professional Liability policies contain a short rate cancellation clause
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Employers
Reinsurance Corporation (ERC) policy contains the standard short rate
cancellation provision.
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Summary of
Policy Exclusions
§
Assumed liability under contract or agreement
except liability applicable in the absence of same.
§
Bodily injury or property damage
·
Unauthorized access/ destruction of
documents/machine or system failure/data processing
§
Dishonesty or fraud/ personal advantage
§
Economic return-market fluctuations
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Employment related claim or suit
§
Fines, penalties, sanctions, taxes, punitive or
exemplary damages
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Insolvency or bankruptcy
§
Insurance company or mutual fund insolvency
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Unauthorized use of trade secretes or
confidential, proprietary information or insider trading
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Activities as a third party administrator of any
plan
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Claims arising out of non discloser of
commission or fees
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Interest rate representations
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Prior knowledge situations
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Claims or suits by an insurance products
provider
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Claims by an affiliate
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Claims for services other than the named
professional services
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Collection of payments respecting insurance
premiums
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Personal injury
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Pollution
§
Provision of unlicensed services
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Real estate investment
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Securities except as respects specifically
covered securities (i.e. mutual funds)
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Erisa, pension and related statutes or any
obligation as a fiduciary trustee with respect to any pension plan
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Willful violation of statute
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Income tax preparation and advice except advice
rendered as part of an insured professional service. Coverage can be purchased by endorsement for
an additional flat annual premium.
§
Subject to all the terms, conditions and
exclusions of the Employers Reinsurance Corporation - ERC policy for the
members of The Canadian Institute
of Financial Planners
E&O insurance program.
Subject to the terms, conditions and exclusions of the CIFPs
Sponsored E&O Insurance policy wording with Employers Reinsurance
Corporation (ERC).
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