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For advisors considering the APA E&O Plan:
Before recommending a product to clients, do you evaluate it in detail? Do you research the company that offers the product? Do you look beyond simple cost issues and consider all product features and benefits? Of course you do — and you should do the same when you're selecting the insurance that protects your business, livelihood and reputation.
Consider the following aspects of the Advocis Protective Association:
Does your E&O insurance plan offer discounts?
The APA sponsors one of the largest single group insurance plans for financial advisors in Canada. The strength these numbers bring to the APA when securing premium rates is unparalleled. Compare the APA's rates to those of any program across Canada — you'll find APA premiums are more than competitive*. Adding to this, the APA offers further value and premium discounts:
Note: Premium discounts are capped at a maximum of 15%.
Why pay twice for your E&O insurance?
The APA knows how stressful claims can be. Making a claim cuts into your valuable time with clients (lost opportunities) and can damage your good name, while paying for your deductible can add financial strain.
The APA looked at what kinds of claims are typically faced by the advisors in the APA plan and negotiated with the program insurer to waive the deductibles for life and mutual fund claims (Coverage A & D). If you have a claim involving sales and service of a life insurance product or a mutual fund investment, your claim will not be subject to a deductible.
* Applies to Coverage A (Life/Mutual Funds) or D (Licensed Administrative Assistant) certificate holders
Why pay twice for your E&O insurance?
Does your E&O insurance provider offer coverage for activities relating to referrals? Defense costs reimbursement for appearances before regulatory bodies? Up to $5 million liability limits? Does it have a "plan aggregate" that caps total claims for all insured participants as a group?
The APA program is one of the few E&O programs for financial advisors that offers a full suite of coverage limit options ? $1M, $2M, $3M, $4M and $5M ? so you can opt to carry coverage beyond regulatory relief and tailor your coverage levels to your practice and needs as your business grows.
We work with our insurer throughout the year to enhance the coverage offerings of our E&O plan ? your coverage evolves and grows with changes in our industry.
Why pay twice for your E&O insurance?
The APA is incorporated as a non-profit organization, a model which sets out very different insurance ideals upon which to operate. Our priorities, as derived from this organizational positioning, are: to enable sustainable E&O coverage for our industry; to facilitate our member participants' ability to access superior coverage; to involve industry members (your peers) in the development process; and above all to ensure we act in the best interests of the professionalism of our industry as opposed to the short-term interests of our "bottom line."
Will your E&O insurance provider be around when times get tough?
The Property & Casualty industry is cyclical in nature. Market contractions in previous years have prompted E&O insurance companies to exit the marketplace, leaving financial advisors scrambling to secure the coverage they need. The APA saw the importance of partnering with insurers that are financially sound and can withstand the inevitable down cycles. Our plan insurer is "A" rated by A.M. Best, which means they will be there to honour their commitment to pay claims even when times are tough.
The APA's function is to sponsor and administer the APA E&O plan for participating financial advisors, including Advocis members and non-members. The APA sponsorship fee covers the costs of program administration and management.
The program is unique in that it features a "self-funded deductible." A portion of the premiums paid by program participants is accumulated in a fund dedicated for payment of the first $100,000 of each insured claim, subject to a pre-determined maximum aggregate each policy year. Claims in excess of this amount are paid by the program insurer.
Historical claims experience under the APA E&O plan has shown that with the $100,000 deductible fund contribution, a fund surplus can accumulate over time. The fund assets built up from member deductible fund contributions are expected to create a sustainable underwriting reserve, ultimately to benefit plan participants through rate reductions, or to place the APA in a position to take on higher deductibles. As a result, APA plan participants will be less vulnerable to insurance industry market cycles, which frequently result in insurers withdrawing from the market, raising advisors' premium costs in the process.
Who created, develops and manages your E&O insurance program? Fellow advisors who have spent their careers in our industry? Or property & casualty insurance companies that don't necessarily understand your business and daily practices?
Advocis established the Advocis Protective Association (APA) in 2004 in order to deliver industry-leading professional liability insurance to financial advisors. The APA's board of directors is comprised of leading members of our industry? your industry peers.
Would you call your car insurer and tell him you might have had a car accident, and ask him what should you do?
Of course not.
Would you call your E&O provider to advise that you might have a claim, and would like to know what to do?
Actually, the APA wants you to do just that. Our unique "claims triage" service not only provides unparalleled service when you do have a claim, but our E&O plan's claims adjusters are available to speak with you about a situation that might become a real claim. These experienced professionals can advise you on how to try and mitigate a situation before it becomes a claim. Not only will this protect your coverage by complying with claim notice provisions within the E&O policy, but we don't record these inquiries as a "black mark" on your file, and your rates won't increase because of a claim.
Does your E&O provider offer educational seminars such as the Advocis-sponsored Protect Your Practice seminars?
Advocis and the APA developed this half-day interactive seminar to equip advisors with the knowledge and skills to effectively understand E&O insurance coverage, and to implement real best practices to protect against potential claims. The Protect Your Practice video interviews are conducted with professionals who understand the intricacies of E&O insurance and provide information for you to implement in your practice.
The Protect Your Practice seminars, and many of the individual presentations delivered by APA staff, are CE-accredited. This not only helps you earn the CE credits you need to maintain your licensing and designation credentials, but it ensures that all education offered is of the highest quality and is directly relevant to your daily practice.
Does your E&O provider meet with advisors face-to-face and share knowledge?
The APA just doesn't offer the Protect Your Practice seminar; APA staff and ABS Inc. regularly speak at industry events on the important topics you need to know about to keep abreast of current industry trends and to protect yourself against claims. Whether it's delivering seminars on the importance of keeping detailed client documentation or demystifying the claims handling process, the APA is dedicated to providing real education to financial advisors.