DG Law: IFAs need to have professional indemnity insurance

According to one legal expert from DG Law, independent financial advisers, along with other professionals who specialise in distributing economic guidance to large firms should make sure they have adequate professional indemnity insurance.

DG Law founder, David Gordon, recently remarked that financial services specialists such as IFAs must invest in essential professional liability insurance cover to protect against claims. Mr Gordon also said that obtaining the proper business liability insurance cover is essential for those professionals who advise on marketing, accountancy, or law.

People will come to rely on the advice these IFAs and related professionals give, said the law firm founder, and these same people will then base their business decisions upon what they’ve been told – sometimes to their detriment.  Whether a professional is advising businesses themselves or consumers directly, in the end people are taking the professional’s opinion, which can become quite costly to the professional if they get it wrong.

The legal expert also stated that legal practitioners are often finding themselves with wills and probate or conveyancing claims made against them by dissatisfied clients who are alleging financial harm after relying on the lawyers’ expertise.  For these cases, having the proper insurance cover is vital, as it can easily result in a settlement award in the hundreds of thousands of pounds for the claimant, especially if the defendant has neglected to follow the proper regulatory practices.

In related news, the Financial Services Authority has recently agreed to raise the upwards compensation limit for the Financial Ombudsman Service to £150,000, up from £100,000.  Industry experts have predicted that this will result in higher professional indemnity insurance premiums.

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