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Forum Moderators: LifeinAsia & httpwebwitch

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Beyond general liability insurance

motorhaven

6:41 pm on Dec 31, 2010 (gmt 0)

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I've carried insurance for web business projects in the past. However, I'm now running into a stumbling block with a new project....

This site involves a partner who's primary business is fee-only financial planning. This site will offer his experience and opinions, as well as a community forum. His articles (and others) are not written as "financial" advice, as the lawyers would say. We need a policy which will not only cover standard liability, but also errors and omissions, and professional insurance for people in the financial market field. Finding this sort of thing for off-line business is easy (he already has that)... but our insurance broker seems clueless when it comes to the web.

And insight or advice is welcome!

LifeinAsia

10:03 pm on Dec 31, 2010 (gmt 0)

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I would try talking to the guy's current insurance company and see if they offer a policy to cover the online part. If not, ask if they know anyone who does.

motorhaven

2:01 am on Jan 6, 2011 (gmt 0)

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We've done that. They can't help.

tangor

2:47 am on Jan 6, 2011 (gmt 0)

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There is a specific in insurance called "Errors and Omissions". You'll need to find a carrier that will cover this...and is affordable as well. E&O is not cheap, and not many carriers (insurance companies) that cover this exposure. Disclaimer: I used to work for an insurance company many moons ago so have some knowledge, BUT I was never an agent, nor a lawyer. Just some common sense advice to dot the "i" and cross the "t" before you get involved in something of this type. You'll have to find a carrier willing to deal with the INCREASED EXPOSURE the web provides since anyone reading the content might/could have recourse for Errors and Omissions. Good luck!

aspdaddy

12:39 pm on Jan 7, 2011 (gmt 0)

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You dont need insurance you need a landing page with a big button to enter the site like this
[nakedtrader.co.uk...]

If you do charge for entering the site , rather than say adsense, you will need to register with the regulator.

motorhaven

2:34 pm on Jan 7, 2011 (gmt 0)

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I respectfully disagree. Any company operating a financial based web site, with a licensed financial advisor, should be insured at least in the USA. All the disclaimers in the world won't stop someone from taking you to court and the expenses associated, even if you win due to the disclaimer. We've got some very good attorneys and they advised we get these bases covered before launch.

aspdaddy

11:06 pm on Jan 7, 2011 (gmt 0)

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You want legal fees expense cover for a paid financial advice website..In case you give out crap advice and they lose all thier mooney..You are joking?

If you find an insurer ask if he will insure me against buying 'bad websites' when I use eLance and pay $50 for them and get sued by my clients

wheel

11:35 pm on Jan 7, 2011 (gmt 0)

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You want legal fees expense cover for a paid financial advice website..In case you give out crap advice and they lose all thier mooney..You are joking?

In some jurisdictions this type of coverage is required by law for financial advisors. It's got let to do with 'crap advice' and more to do with consumers' tendency to sue for perceived injustices.

motorhaven

11:56 pm on Jan 7, 2011 (gmt 0)

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Wheel said it well. :) Although he/we won't be operating the site in the capacity of financial advisors, one of the partners is a licensed financial advisor and people's perception might be that the site will be operating as financial planning/investing, even though it won't recommend stocks, funds, etc. Its more of a knowledge base of his experience and those in the industry about sound financial practices. Personally, my opinion is anyone operating a business should carry at the very least a general liability policy, you can get a million dollars coverage for only a few hundred per year, less than the cost of 1 hour with a good attorney.