Professional Indemnity Insurance offers some form of cover to a financial advisor's client for claims against the advisor resulting from bad
judgement or negligence on the advisor's part. Claims are obviously
treated on a case-by-case basis, and negligence must be legally proved.
The amount of professional indemnity cover is limited to the value of the advisor's policy.
This cover can be reassuring where the advisor works alone or for a
small firm that may not have the capital means to settle any claims. Please Note:
Professional Indemnity Insurance is not a legal prerequisite for
practising financial advisors. In addition, the public should be wary
about drawing conclusions based on whether or not an advisor has cover.
By having indemnity cover, it is not implied that the advisor is not
confident in quality of advice given.
