Focus your energy on serving your customers
Give yourself the best protection
You may be sued for misconduct, negligence, carelessness or incompetence in the performance of your professional activities. It is important to properly cover these risks since the cost of legally defending yourself can be very high.
Professional liability insurance is THE BEST protection to cover you and your firm against all claims resulting from your services.
La Turquoise has more than 30 years’ experience in professional liability insurance. Whether it's advising you on the product you need or assisting you during a claim, you will truly appreciate the peace of mind that our expertise provides.
Preventive legal assistance
Fast claims service
Directors and officers / (D&O) (external board members)
New sub-limits in cyber protections for Social engineering fraud and Cyber extorsion for policies effective on or after May 1, 2022. (certain conditions applies)
Cyberrisk policy with higher limits and more extensive protections.
We can amend your current policy to cover both your new firm's operations and your personal activities. A broker will simply ask you a few questions to determine whether an additional premium will apply.
Yes, for an additional premium from the date the change takes effect.
No. We will still give you the best discount possible. In addition, this discount is only available on renewal. We cannot give discounts during the policy term.
Yes. We will have to add an endorsement to include fraud in your policy. This endorsement may require an additional premium.
No. He must have his own policy. Your policy covers your employee representatives, except those with a mutual funds licence.
Yes, because the policy is based on filed claims. We need to receive an updated proposal every year. If your situation hasn’t changed, your policy will simply be reconfirmed.
No, we don't need the originals. An emailed or faxed copy is fine.
No, that’s not necessary. If your account hasn't changed, we'll use the information already on file.
Why you should take out professional liability insurance
Market volatility can cause clients to sue their financial services representative. Here's an example:
A client invested $200,000, left to her by her husband, in financial products. From 2000 to 2002, this investment lost more than $100,000 due to market fluctuations and the global financial crisis. The client accused her financial advisor of failing to take sufficient steps to protect her capital or factor in her low-risk tolerance.
After seven years of legal proceedings, it is estimated that the financial services representative's professional liability insurer will have to pay a total of around $60,000 by the time this case is settled.
Acting as an intermediary is risky. Take the case of a financial services firm that acted as a managing general agent and, despite its best efforts, was dragged into a legal quagmire.
Through the firm, an independent life insurance agent sold a client $1.4 million in universal life insurance.
The agent recommended that the client liquidate her investments and take out a margin loan secured by the value of her property in order to pay the premiums for her universal life insurance policy.
The client reversed course, claiming that she never needed such an insurance policy and did not ask for it. She alleged that the agent had cooked up a scheme in order to pocket a hefty commission. She initiated legal proceedings against the agent, the financial services firm and the life insurer.
Although the case was primarily against the agent and the life insurer, and no accusation was levelled against the financial services company, it found itself “stuck” at the centre of the dispute.
After five years of litigation, it is estimated that the financial services firm's professional liability insurer will end up paying approximately $80,000, including around $50,000 in defence costs, to settle the dispute.
Here's what could happen to you in a dispute over a life insurance policy.
Based on misrepresentation and some inaccurate general statements in a client's insurance application, an insurance company rejected a $50,000 life insurance claim.
The facts of the case were that six months after the insurance policy was issued, the client's child died of congenital heart disease. However, when the client had applied for insurance, she had answered "no" to the question "Was the child born prematurely?", when it was indeed a preterm birth. Her insurance advisor at the time had no reason to doubt the truth of her response.
The insurance company discovered the misleading nature of the statement and identified other inconsistencies in the insurance application. It dismissed the claim, cancelled the insurance policy and refunded the premiums paid.
For her part, the client claimed to have made a complete, clear and truthful statement. She accused the advisor of negligence when he completed the application, and is suing both him and the life insurance company.
To date, the legal costs associated with this case total $24,600. An additional $25,000 has been allocated to settle the dispute. The parties have entered into negotiations with the aim of reaching a mutually acceptable agreement.
Disagreement with a client, even over small amounts, can prove to be very costly.
A client retained a financial services representative to purchase life insurance for a partnership that would:
- enable his estate to redeem the company shares owned by the deceased partner; and
- act as a tax-free pension plan.
The financial services representative sold two $2 million life insurance policies and realized a substantial commission in the process.
Other advisors then informed the client that life insurance benefits were not tax-free. The client then asked the representative to cancel the policies, which he did. The insurance company accepted the cancellation and reimbursed all the premiums, except for $9,000 as payment for the coverage while the life insurance policies were in effect.
The client initially claimed this amount from his advisor, alleging that the life insurance policies had never met his requirements. He then upped his claim to $250,000 in damages as compensation for alleged trouble and inconvenience.
The actual value of the claim should not exceed $15,000, which includes capital, as well as interest and costs associated with litigation involving $9,000. Even if competing financial advisors add fuel to this claim and the damages are grossly exaggerated, the advisor must still defend himself against allegations of malpractice.
To date, the financial services representative's professional liability insurer has paid $66,000 in court costs because the disgruntled client has totally committed to the lawsuits by filing a continual succession of applications and expert reports with the court. No agreement is on the horizon because the plaintiff is totally determined to plead his case.
You could be held professionally liable even if the facts show that you did not make a mistake.
A client applied for disability and critical illness insurance. The financial services advisor informed her that she would not be covered until the effective date of the insurance policy, unless she immediately submitted a cheque to pay the first month's premiums in exchange for a cover note. The client unequivocally understood that the coverage would only come into effect after the cheque had been provided.
During the following weeks, the advisor requested a medical report from the client. When the client's doctor failed to prepare it on time, the insurer notified both the advisor and the client to this effect. The problem was resolved nine months later. The insurer then issued the insurance policy.
Upon receipt of the policy, the client immediately filed a claim, stating that she had been diagnosed with a critical illness. The insurer dismissed the claim after determining that the illness was a pre-existing condition, which the client had failed to disclose. The client then sued both the advisor and the insurer, claiming $50,000 in damages, plus interest.
Even though the advisor did not make an error, did not overlook anything and was not negligent, and despite the fact that the dispute was actually between the client, who clearly did not disclose her pre-existing condition, and the insurer, which may very well have not conducted a full risk analysis before accepting the application, the case will end up in court because the client is seeking to make her case at any cost.
To date, it is estimated that the professional liability insurer will have to pay a total of approximately $43,000 before the court comes to its decision.
The confidentiality of the files you manage can become a sensitive subject.
A client sued her life insurance agent, the managing general agent (MGA) and the insurance company for damages and interest for breach of privacy. The client claimed that the life insurance agent had discussed her medical records with the client's father.
In reality, the client's father had always handled his daughter’s life insurance affairs (applications, follow-up, etc.). When the insurer in this situation refused to modify one of the rating conditions because of information contained in the medical report (without disclosing its contents), the agent informed the father and explained that his daughter would have to provide written permission to the insurer if she wanted the medical report information to be shared with her doctor. The MGA merely served as a channel of communication between the life insurer and the agent.
Despite no medical details being released, the client is seeking $300,000 in damages from all parties for breach of privacy, stress and exemplary/punitive damages. The client wishes to have her day in court and refuses to acknowledge that her claim is without merit.
The MGA's professional liability insurer expects to pay more than $60,000 to take the case to court.
Taking over another financial services representative’s clientele carries risks.
A financial services representative, who operated his own company, acquired another mutual fund agent’s book of business. That person retired and subsequently died.
Five years later, one of the new agent’s clients asked to make a withdrawal from her investments, as she had done several times in the past with her former agent. She was in desperate need of money and decided to proceed even though she was told that the transaction involved transfer fees. When she later learned that the transfer fees totalled $9,000, she decided to sue her current agent and his firm, claiming that they had failed to adequately inform her of the consequences of her decisions.
The client refused any attempt to compromise and settle out of court. She even turned down an offer of $5,000. The current agent, who acted reasonably and professionally, insisted on his full defence on the grounds that he could not be held liable for the original agent’s erroneous information.
The client took the matter to court and was awarded the amount claimed, plus interest and costs. The reasoning was that even if the client insisted on getting the money quickly, it was up to the current agent to warn her of the potential consequences, including the cumulative effect of the withdrawals made by the original agent. In other words, the current agent should have protected the client from herself.
The full defence of the case resulted in legal expenses of $17,800 for the professional liability insurer, plus compensation of $15,555.
Your forgetfulness can be very costly in the case of a lawsuit.
During their annual meeting, a client and his advisor agreed to make three changes to various financial products (life insurance and mutual funds). The required forms were duly completed and signed for two of the three transactions. The third transaction was put on hold until the client's chartered accountant determined whether the payments should be made from the client's personal account or the company's bank account.
The agent received the accountant's instructions a month later, on the eve of the Christmas holidays. He later completely forgot to notify the insurer of the changes to the bank information. Since the client was abroad, he did not receive letters from the insurer informing him that the insurance policy was expiring, nor subsequent letters advising him that it had expired. Unable to reactivate his insurance policy or find another policy with similar premiums, the client commenced a lawsuit against the agent for $1 million (the value of the life insurance policy he lost).
After four years of litigation, this case resulted in an out-of-court settlement of $250,000 plus legal fees of over $70,000. Fortunately, the client did not die in the meantime. If he had, the agent’s forgetfulness would have cost an additional $1 million.