As a financial professional navigating today’s increasingly complex landscape, you encounter unique risks that can threaten your reputation and financial stability. Even with attention to detail and a client-first approach, errors and oversights can happen, potentially resulting in costly lawsuits and reputational damage. Errors and Omissions (E&O) insurance, also known as professional liability insurance, is essential for protecting your practice against these inherent risks.
Common triggers for E&O claims among financial professionals include:
Notable E&O claims instances
- AI driven advice: Two registered investment advisors (RIAs) faced allegations of misleading advertising related to their AI strategies. One firm claimed proprietary AI capabilities without providing supporting evidence, while the other asserted that it was the first regulated AI-based financial advisor.
- Regulatory filing errors: In 2024, SEC filed recordkeeping cases resulting in civil penalties worth more than $600 million against over 70 firms. Additionally, it reported that 26 financial firms have agreed to pay a cumulative penalty exceeding $390 million to settle allegations related to deficiencies in recordkeeping practices.
- Unsuitable recommendations: In 2024, a retiree was awarded $152k in a FINRA arbitration after being sold high-commission annuities from Colorado Bankers Life, which were deemed unsuitable for her investment profile. The panel found that the product aggressively marketed by brokers did not align with the client’s liquidity needs or risk tolerance.
- Misleading investment advice: A 2025 case involving a wealth management and investment banking company faced the severe consequences of misrepresenting product risk, where overconcentrated, complex structured notes sold as low risk led to a $133 million FINRA award. This underscores that misleading advice and inadequate documentation continue to be among the most significant E&O exposures for financial advisors in the US.
Next steps
In today’s complex financial environment, the risks you face as a financial professional are evolving—and so are the potential consequences of errors or omissions. Even with the utmost care, mistakes can happen, exposing you to costly legal claims and reputational harm.
Errors & Omissions (E&O) insurance is a critical safeguard that helps protect your practice from these risks, including those arising from emerging challenges like AI-driven advice, regulatory filing errors, and suitability issues. If you haven’t already, we strongly encourage you to complete your enrollment in Marsh's Agent E&O program online—it only takes a few minutes.
All agents affiliated with WFGIA and its subsidiaries who hold an active provider appointment, as well as all TFA representatives, are required to maintain E&O coverage through the WFGIA/TFA program administered by Marsh. This is a mandatory condition under your Financial Professional Agreement or Agent Agreement.
Please note: NY agents can either secure E&O coverage through their carrier of choice or explore options now available through Marsh.
Please review the full E&O policy for details on exclusions, limitations, and coverage terms to ensure you understand your protection fully.