You owe every client a fiduciary duty and the regulator can audit you any year. Two policies answer for that, and they are usually sold as one.
A registered investment advisor manages other people's money under a duty to put their interests first, and is examined by the SEC or a state securities department on a schedule it does not control. The claims follow the duty: a client says the portfolio was unsuitable or the fees were not disclosed, or a regulator says the compliance program was not followed. Errors and omissions insurance for an RIA defends both, and it needs three things a generic professional policy may not carry: a fiduciary wording, regulatory defense costs, and coverage for the firm's principals personally. We place it for solo RIAs, hybrid firms that also clear through a broker-dealer, and firms with several advisors, with cyber and a fidelity bond alongside.
Tell us the situation.
One licensed human replies the same business day — not five agents, not an auto-responder. If the policy you have is already the right one, we will tell you.
We use this to quote and service your insurance, and we do not sell it or pass it to lead networks. Privacy policy.
Send us what you have. We’ll tell you if it’s right.
Your current policy paperwork, a renewal notice, or nothing at all. A licensed agent reads it and replies the same business day.
What investment advisor businesses actually need.
Errors and omissions with fiduciary wording
Claims that your investment advice, portfolio management or a breach of fiduciary duty caused a client loss, and the cost of defending them.
Without it — A client who lost money in a downturn has a lawyer who will frame the loss as a breach; the defense alone exceeds what most small firms can absorb.
Regulatory and disciplinary proceedings
Legal costs for an SEC or state examination that escalates, a subpoena, or a formal enforcement action.
Without it — A routine examination that finds a deficiency becomes counsel time in months, not hours, and it is not a claim by a client.
Directors and officers for the firm
Claims against the firm's owners and officers in their management capacity: from a partner, an employee or an investor in the firm itself.
Without it — A dispute between partners over the firm, or a former advisor claiming wrongful termination, is not a client claim and the E&O policy will not respond.
Cyber liability
A breach of client records, a ransomware event, or funds transfer fraud where a spoofed client email leads to a wire.
Without it — The SEC expects a written cybersecurity program and will ask about the incident; the notification and forensics bill lands before any claim does.
Fidelity bond
Theft of client funds by an employee. Required if you have custody, advise ERISA plans, or by many custodians.
Without it — An ERISA plan requires its own separate bond by law; an advisor without one cannot take the plan on.
General liability
Injury to a visitor and damage to your office, which your lease requires.
Without it — The landlord asks for a certificate before you get the keys.
The claims we actually see.
Ordered by how often we see them, not by how dramatic they are. Each one names the coverage that answers it — and the policy people wrongly assume already does.
Most common
A client alleges the portfolio was unsuitable after a loss
Covered by Errors and omissions
Suitability is proven by the file: the investment policy statement, the risk questionnaire, the notes from every review. A thin file is what turns a defensible claim into a settlement.
Common
An examination finds compliance deficiencies
Covered by Regulatory defense costs, within their sublimit
Undisclosed conflicts, marketing rule violations and custody issues are the findings of the year. The policy pays counsel; it does not pay fines.
Less common, severe
A wire leaves a client account on a forged instruction
Covered by Cyber funds transfer fraud, and sometimes E&O
Whether the money comes back depends on the custodian and on whether your firm verified the request by phone. Carriers ask for that procedure in writing.
Less common, severe
A departing advisor takes clients and the firm sues, or is sued
Covered by Directors and officers, if carried
A dispute inside the firm is a management claim. Most small RIAs carry E&O alone and discover the gap the year a partner leaves.
What the policy will not cover.
Pick a procedure to see what the exclusion actually means and whether it can be placed somewhere else.
The policy covers negligent advice and management within the disclosed practice, and the cost of regulators asking questions. It never pays fines, disgorgement or the return of fees, and it does not cover what you hid from the carrier.
Where an investment advisor policy stops
Fines, penalties and disgorgement
A regulator ordering you to return fees or pay a penalty is uninsurable as a matter of public policy; the defense is covered, the outcome is yours.
Can it be placed? No.
Custody you did not disclose
Holding client assets, or having authority to move them, changes the rating and the required bond. Undisclosed custody voids the response.
Can it be placed? Yes, once declared, with a bond and a surprise examination.
Private funds and personal stakes
Advising clients into a fund you own a piece of, or a private placement you are compensated for, is excluded on most forms unless specifically added.
Can it be placed? Sometimes, with the conflict disclosed to clients and to the carrier.
Claims from before the retroactive date
Coverage is for claims made during the policy term about work done after a set date. Moving carriers without carrying that date forward leaves your earlier years uninsured.
Can it be placed? Yes. Insist the new policy honors the old date.
What the insurance company will ask about your investment advisor business
We read the applications the markets use for businesses in this field and pulled out what they actually ask. Have these answers ready and a quote takes a day instead of a week, because nobody has to come back to you for the missing piece.
About the business
- What is your company's legal structure (LLC, corporation, partnership)?
- Since what year has your company been continuously operating?
- What percentage of your revenue comes from each type of service you provide (asset management, financial planning, commissions, fees, other)?
- Are you engaged in any business other than serving as a family office or investment advisor?
How you operate
- Do you manage discretionary assets for clients?
- What is your investment strategy for options?
- What percentage of assets under management involve options trading?
- Do you maintain a written system for identifying and avoiding conflicts of interest?
- Do you have formal written policies on anti-discrimination, anti-sexual harassment, and employment practices?
Safety and controls
- How many employees do you have (full-time and part-time)?
- Has employee turnover exceeded 25% in any of the last three years?
- Do you have an employee dishonesty insurance policy that covers theft of client funds?
- Have you been audited by the SEC, FINRA, or any state securities regulator?
Your history
- Has there been any change in ownership in the last 12 months?
- Have you or anyone in your company been the subject of any regulatory, investigative, or administrative proceedings?
- Have you been fined or sanctioned by any regulatory body or government agency?
- Have you had any trading losses exceeding $5,000?
- Have there been any inquiries, complaints, civil cases, criminal cases, or arbitration proceedings against you in the last five years?
Money and people
- What were your gross revenues for the last three years?
- Are there any facts, errors, omissions, or circumstances that might lead to a claim under the insurance you're requesting?
Have these ready
- Your last three years of tax returns and financial statements
- List of owners, partners, and officers with their ownership percentages
- Names and professional designations of all advisers and their CRD numbers
- Your current Form BD and Form ADV Parts I and II
- Your latest regulatory examination report and management response to it
You answer what you can; a licensed agent fills the rest with you.
What our investment advisor clients ask us.
How much does RIA insurance cost?
A solo advisor with under fifty million under management and a clean record usually pays a few thousand dollars a year for a one million dollar limit with regulatory defense included. The price scales with assets under management, the number of advisors, discretion, custody, and any complaints or examination findings in the last five years. Adding directors and officers and cyber roughly doubles the package for a small firm.
Does an investment advisor need a fidelity bond as well?
Often. Custodians commonly require a bond, and any advisor to a retirement plan governed by ERISA needs a separate ERISA bond by law, sized to the plan assets it handles. A fidelity bond covers theft by your people; errors and omissions covers mistakes. The two are priced and issued separately even when one carrier writes both.
What does an investment advisor insurance application ask for?
The applications we work from ask where you are registered, whether you are also a broker-dealer representative, assets under management and client count, whether you manage on a discretionary basis, whether you have custody, whether you invest clients in anything you have a stake in, your revenue split between fees and commissions, whether you use engagement letters and a conflicts policy, examination history, and any complaints, arbitrations or license actions in five years. Have your Form ADV, a sample agreement and financial statements ready.
I only do financial planning. Is this the policy I need?
If you build plans and do not manage assets, a financial planner policy is narrower and usually cheaper. The moment you are registered and managing accounts, the fiduciary wording and regulatory defense on an RIA policy are what a claim will test.
Commercial insurance is 96% of what we do — it is not a department here, it is the whole business. Not ready to talk? The guides answer the questions this page raises in more depth. Already insured with us and need a certificate or a policy change? Ask the service team rather than starting a quote — it is faster and it goes to the people whose job it is. We also write home and auto, which is usually cheaper alongside the business policy than apart from it.
Handed a lease, a vendor packet or a client contract with insurance requirements? Paste it into the COI Requirements Decoder to see what each one means for your business, or read what the requirements mean.