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Financial Advisor Insurance

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Financial Advisors insurance

Financial advisor insurance NZ

Financial Advisor Insurance is a package tailored specifically for financial advisors. It is a bundle of insurance policies that provide protection against potential threats and risks that advisors might face in their line of work. This insurance can cover various incidents, from professional mistakes to unforeseen accidents.

Why is financial advisor insurance important? 

Having Financial Advisor Insurance ensures that advisors can work with confidence. By knowing they are covered against potential liabilities, they can focus on their main task – providing sound financial advice to their clients, without the looming fear of financial setbacks due to unforeseen incidents.

In New Zealand, the average cost of financial advisor insurance typically ranges between $200 – $400 per month. 

It’s crucial to have financial advisors coverage if your business:

  • Offers financial advice to clients
  • Handles sensitive client data
  • Operates with multiple employees
  • Is exposed to potential lawsuits

What insurance covers are typically included in financial advisors insurance? 

Financial Advisors Professional Indemnity

Financial Advisors PI protects finance advice businesses from financial losses if they make mistakes or are accused of negligence while doing their job. 

Best For
  • Negligence claims 
  • Errors & Omissions 
  • Professional mistakes 

Public Liability

This policy covers common financial advice business risks including bodily injuries, customer property damage, and advertising injuries. It’s required for most commercial leases.

Best For
  • Business Accident Coverage
  • Third-party Damages
  • Legal Cost Protection

Statutory Liability

This cover is a type of protection that helps financial advisors cover costs if they accidentally break certain laws or regulations.

Best For
  • Unintentional breaches protection
  • Legal costs
  • Fines and penalties

Cyber Insurance

Insurance that helps protect financial advisory businesses from financial losses caused by cyber-related incidents, like data breaches and computer attacks.

Best For
  • Ransomware attacks
  • Phishing scams 
  • Cyber extortion 

Management Liability

Management liability insurance in NZ shields financial advice company leaders from legal and financial risks due to their managerial responsibilities.

Best For
  • Directors liability 
  • Employment disputes
  • Legal defence

Business Contents Insurance

Business contents insurance in NZ is for protecting all the important stuff inside an financial advisory business. If there’s a problem or accident, the insurance can help with the expenses.

Best For
  • Accidents 
  • Floods
  • Fires

How much does financial advisors insurance cost?

Financial advisors insurance premiums are calculated on several different factors including:

  • Types of cover
  • Turnover
  • Location 
  • Claims History 

Financial advisors insurance in NZ typically costs between $200 to $400 per month.

Who needs financial advisors insurance?

Anyone who provides financial advice in a professional capacity needs this insurance. Whether you’re a solo consultant, part of a small firm, or operate within a large organization, it’s crucial to have adequate protection. Not only does it safeguard you, but it also assures your clients that they’re working with a professional who takes their business seriously.

No, it’s not legally mandatory for financial advisors to have this insurance in New Zealand. However, considering the potential risks and the increasing demand from clients for advisors to be insured, it’s a wise decision for peace of mind and professional credibility.

Notifying your insurer is crucial. If you expand or modify your services, you may need to adjust your coverage to ensure it aligns with the new risks. It’s about staying proactive and ensuring you’re not left unprotected.

How do I get a financial advisor insurance quote? 

We understand the unique needs of financial advisors in New Zealand. Leveraging our extensive industry knowledge and partnerships, we provide comprehensive financial advisors insurance quotes from the top insurers in the country and globally. Entrust us with your requirements, and we’ll ensure you receive the most competitive and tailored coverage options available.

To obtain a financial advisors insurance quote we may require you to provide some fundamental details about your business, such as:

  • The name of your business
  • The total number of employees
  • Predicted annual income
  • Years of experience in the industry

How do I get proof of financial advisors insurance?

You can usually get proof of financial advisor insurance same day when you purchase insurance through Gerrards.

Acquiring a financial advisor insurance certificate from traditional insurance brokers may require a few weeks, a delay that could create problems for policyholders who need instant insurance proof for an imminent contract or project.

To obtain insurance coverage promptly, contact one of our financial advisors insurance brokers. 

What does financial advisor insurance not cover?

Intentional wrongdoing

This means that if an advisor willingly engages in deceitful or fraudulent behavior, the insurance won’t provide coverage. Deliberate acts of harm, misleading clients, or acts outside of professional standards aren’t covered.

Known claims

If you’re already aware of a claim or a situation that could potentially lead to a claim before getting your insurance, it won’t be covered under the new policy.

Services outside your coverage scope

Always be clear about the services you’re insured for. If you provide a service that isn’t mentioned in your policy and a claim arises from it, your insurance won’t cover it.

Other common questions about financial advisors insurance

Defense costs, which include legal fees, are usually covered in most policies. Still, always review to know the extent and limitations. Knowing what legal expenses are covered upfront can save you from unexpected out-of-pocket costs later.

Past claims can influence your insurance premium and the terms of your policy. However, they don’t necessarily disqualify you from getting coverage. Transparency is crucial. Make sure you disclose past claims so the insurer can adequately assess the risk.

Absolutely. As your business grows or evolves, you can recalibrate your coverage to match its size and the particular risks associated with its current operations. Gerrards is always available to guide you through policy modifications.

Immediate reporting is best. Even if you’re unsure whether it will lead to a claim, informing your insurer about potential issues can streamline the process should a claim arise.

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