Brokerage Services Liability

Brokerage Services Liability protects against losses resulting from Wrongful Acts in rendering or failing to render Brokerage/Advisory Services.

Sample Endorsement
Coverage Summary

Claims Examples
  • A bank employee provides investment advice to an elderly customer who allows him to purchase securities on her behalf. When the securities do not perform well, family members sue the investment advisor and the bank for negligence in rendering investment advisory services. While depreciation in value of securities due to market fluctuation unrelated to any Wrongful Act is not covered, defense costs incurred to defend the bank and the advisor are covered.
  • A bank works with a securities firm to provide brokerage services to its customers through a dual employee arrangement. The bank relies upon the securities firm to supervise the activities of the broker. The broker changes the mailing addresses on several accounts to a post office box, embezzles funds from these accounts and then mails false statements to the customers to hide the missing funds. Upon discovery of the fraudulent activity, the defrauded customers sue the bank for negligent supervision.
  • Available as part of the Bankers Professional Liability endorsement; part of the Broad Form Company Liability endorsement; or as a separate endorsement to the D&O Policy.
  • Brokerage/Advisory Services means the purchase or sale of securities, mutual funds, annuities, variable annuities, or life, accident or health insurance through an employee of the Company or a third-party service provider pursuant to a contract between the Company and the service provider.
  • Financial advice, investment advisory services and financial planning advice in connection with the provision of Brokerage/Advisory Services are also covered.

Notwithstanding any language to the contrary, nothing contained herein constitutes nor is intended to constitute an offer, inducement, promise, or contract of any kind. All coverage descriptions and claims examples are provided for informational and educational purposes only and are not a representation as to coverage for any particular claim and are not represented to be error free. Coverage for any claim is determined upon the specific facts of the claim, the terms and conditions of the policy and applicable law. For details on the coverage provided by your specific contract of insurance, please refer to your policy. Coverage is subject to underwriting guidelines and may not be available in all states. Limits may be capped for underwriting reasons. Any links to any sites which are not originated by ABA Insurance Services Inc. (ABAIS) are provided only as a courtesy and are not intended to nor do they constitute an endorsement by ABAIS of the linked materials.