Professional indemnity (PI) insurance is a consumer protection plan so that clients will be able to get compensation in return of having any loss because of negligence, error or act after getting the financial advice given. Having financial advisors professional indemnity Brisbane is helpful for a tax adviser, as it gives coverage in case of any error or act of negligence. Getting a PI according to your requirements is necessarily to have as in the absence of the same, results will not have a burden to the pocket, but also it will become the breach of code of conduct and you might have the registration termination.
Understanding the Difference Between TPB and ASIC Requirements
At Integrity Insurance Solutions, the PI insurance needs consist of Australian Securities and Investment Commission (ASIC) needs for Australian Financial Services (AFS) licensees. Two key differences between both of which are explained:
- Our PI Insurance needs to apply to all representatives that are the registered members along with the one with AFS license.
- PI insurance cover is necessary for tax advice, but ASIC’s requirements are not extended to tax advice.
Who Needs To Have PI Insurance Policy?
- One who receive money or any kind of reward in exchange of providing financial advice services, then taking a PI insurance cover is necessary to meet your requirements and for the clients as well.
- If you are not charging any fees or rewards in exchange of financial advice means you are either a contractor or an employee, then there is no need to take the coverage of PI Insurance because in case of any claim or mishap, the real owners will have required with the coverage. But, you must provide the name of the employer, registration number and the principal.
What Are the Minimum PI Insurance Requirements?
Any PI insurance provider’s needs to have the cover according to the requirements necessarily, but some factors put direct effect to the decision:
Cover Amount
To get the cover you must share some details like the turnover of your business and then the coverage will be provided, including legal and the protective costs.
Scope Of Cover
The policy Includes civil liability because of any negligence, act or error in providing the financial advice service. Financial advisors professional indemnity Brisbane is created for the coverage to advisors.
Legal Costs
The professional indemnity insurance for financial advisors gives the legal and defense costs along with the minimum limit of cover. This can also be increased to manage the expenses.
Who Are Covered?
Getting the policy gives coverage to:
- A financial advisor taking out the policy
- Contractors, in case they do not have the professional indemnity insurance cover, then you must get the cover along with the work of contracts for which you are liable.
- Directors, partners, representatives and employees who are offering financial advice services as a representative of a financial advisor.
- It is necessary to any individual or entity giving the tax agent services in place of you or as the representative of you.
Spending some time and money for the risk management is not an advice move, but on the same time this is what every insurer needs to be aware about. So, always ready with future safety plans to deal with any of the mishap before that mistake changes to huge loss.
