Fiduciary .***

MR. WATSON: A fiduciary is a person in a position of financial trust or special trust. It's the Golden Rule. I will do for you as I would want you to do to me if the rules were reversed. You have the integrity and responsibility to your insurance company and to the client you represent. So you are the fiduciary to both, the company and your client, but you are an agent of the company. A fiduciary is a person in a position of trust. By having this insurance license you are presumed to have knowledge that others do not possess. So, you have a responsibility to be fair, open and honest. No commingling of funds.

 

Professional Liability Insurance , Errors & Omissions Insurance ***

MR. WATSON: If a doctor saws off the wrong leg, what are you going to do? Sue. What stands behind him? Malpractice insurance. This is malpractice insurance for the financial planner. It covers you for things you didn't do but should have done. Does that make sense?

MR. WATSON: Like a doctor, if he does something wrong, what are you going to do? Sue him. So if I rip you off, what are you going to do? Sue me. Professional liability insurance, or errors and omissions (E & O) insurance protect the agent against personal liability for claims.

WOMAN: So insurance agents in the state have professional liability?

MR. WATSON: Yes.

WOMAN: Who carries the insurance?

MR. WATSON: You do, the agent. Sometimes your companies will buy it for you; other times, you buy it.