The legal services provider DG Law has urged independent financial advisers (IFAs) not to skimp on professional insurance cover, no matter how tough they may be finding it in the current economic climate.
In fact, DG Law stressed that it is more important than ever during financially unstable times to have a professional indemnity insurance policy in place. This is when IFAs are the most at risk from big claims, as other organisations and individuals attempt to recoup their own losses through litigation.
Should IFAs accidentally give poor advice or make a mistake, the resulting legal action could have a devastating effect on their livelihood if full professional insurance protection has not been arranged.
The founder of DG Law, David Gordon, said that many of the IFAs he deals with have considered reducing or dropping their legal cover in favour of cutting costs. He warned against this, saying:
“You can never quite foresee every eventuality,”
“You can see the ones that have happened to other people and I think there’s never a good time to have a claim made against you. And therefore, that’s like all insurance policies, where the peace of mind [comes in].”