E&O Insurance for Media Personality (TN)?

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E&O Insurance for Media Personality (TN)?

Post by jeffrosecfp »

Have an interesting situation and curious if anyone has any guidance on some options I may have. I'm a former financial planner who used to have his own registered investment advisory firm (I sold the firm earlier this year).

In addition to that, I also run a personal finance blog named https://www.goodfinancialcents.com/. While as a practicing advisor, I owned E&O insurance on my business and always assumed it would carry over for anything that I did online.

Now that I'm not a "practicing" financial planner, although I have retained my CFP certification, I wasn't sure if the E&O insurance, which was initially purchased for the firm, would still cover me as a media personality.

I don't give specific investment advice but I do offer recommendations where individuals may open a brokerage accounts, refinance their mortgage, or purchase life insurance (I also owned https://LifeInsurancebyJeff.com which now redirects to my blog) Most of these I am compensated on a lead-per-acquisition basis.

The question is....what sort of policy should I be considering to cover me in the event that someone were to pursue litigation against me?
--Jeff Rose, CFP®

The Blog 💻 : GoodFinancialCents.com
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Re: E&O Insurance for Media Personality (TN)?

Post by MBRCatz »

" I owned E&O insurance on my business and always assumed it would carry over for anything that I did online." This makes me cringe. E&O policies are usually extremely specific on exactly what type of activities are covered. The application is usually a "warranty" as to ALL of your activities. If your policy doesn't specifically say it will cover those activities, especially online, it most likely isn't covering them.

No one can know exactly what - or who - your policy covers, without reading it. I strongly suggest you do so, right now.

The kind of policy you probably need, is a combination of cyber liability (what if your blog gets hacked, and "you" refer hundreds of people to a website that plants malicious code on their computers?) and E&O. The cyber will be easier to get. The problem with the E&O, is that you ARE making recommendations (what if you recommend a "great deal" that eventually turns out to be a Ponzi scheme?) How many states are you licensed to make that recommendation in? How many countries? What controls do you have in place over who comes to your blog/website, so that you're not acting as a licensed professional for a client who is in a territory where you do NOT carry a professional license? It's going to be very, very hard to control that. That's why you don't see very many other people in your shoes, making those referrals.

One other note - that "lead per acquisition" basis, could be violating insurance licensing laws in a state, since it looks an awful lot like commission. And you can't be paid commission unless you have a license to sell that insurance product in every state I've ever seen. And, the license has to be valid in the state of residence of the purchaser. You might want to consider discussing this with an attorney who specializes in insurance compliance issues. No policy in the world is going to pay your legal defense costs or judgement, if you're acting without a license, which is an illegal act.
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