Which policy should investment consultants purchase to shield themselves from potential errors and omissions?

Investment consultants should consider purchasing professional liability insurance to shield themselves from potential errors and omissions. This type of insurance is specifically designed to protect professionals against claims arising from negligence, misrepresentation, or failure to perform their professional duties. In the context of investment consulting, where providing financial advice and managing clients' assets is crucial, having this coverage is important because it helps mitigate the financial impact of claims related to these professional activities.

Professional liability insurance not only covers defense costs but also provides coverage for settlements or judgments that arise from lawsuits related to professional services. This is particularly vital in a field where the stakes are high and the potential for errors can lead to significant financial consequences for clients. By having this protection, investment consultants can focus on serving their clients without the constant worry of the financial implications of a lawsuit stemming from an unintentional mistake in their professional services.

General liability insurance is geared toward protecting against claims related to bodily injury or property damage, while umbrella insurance provides additional coverage above and beyond what is included in other policies. Errors and omissions insurance, while similar, is not as commonly used as the term “professional liability insurance” to cover these specific risks in professional services, although in some contexts they may refer to the same coverage.