Traditional Broker/Dealer errors & omissions policies can leave Registered Representatives with large deductible exposure. DRIP has the ability to lower deductibles by as much as 90%.
- Drastically reduces the errors & omissions exposure of Registered Reps
- Mitigates Registered Reps' personal financial exposure
- Provides value in recruitment and retention of Registered Reps
- Integrates seamlessly with existing errors & omissions policy
Deductible Reimbursement Insurance Program / DRIP
The Deductible Reimbursement Insurance Program (DRIP) effectively insures Registered Representatives for their deductible obligation under their firm's current Broker/Dealer errors & omissions insurance policy.
Under a traditional Broker/Dealer errors & omissions policy, Registered Reps can be burdened with an individual deductible of $15,000 to $50,000 per claim. These high deductibles create liability and exposure for both the individual Rep, as well as the Broker/Dealer.
The policy addresses several concerns:
- Unrealistic ability for individual Rep to pay deductible
- Emotional and financial stress
- Impact on recruiting and retention of qualified Reps
- Financial exposure for Broker/Dealer in event of default by Rep
Recruiting and retaining quality Registered Reps has become a significant and challenging priority for Broker/Dealers. The DRIP allows a Broker/Dealer to mitigate the above concerns and keep the focus on productivity; in what is a very competitive industry.
It is a simple concept that reimburses the Reps deductible in the event of a claim. The DRIP is an insurance policy on the deductible itself.
The cost is relatively low, $500 premium per individual Registered Representative or Registered Investment Advisor and a $150 annual policy fee (in addition some states require a small premium tax usually under $25.00 per year individual). The deductible can be reduced from as high as $50,000 down to $5,000 per claim (coverage for higher deductibles available).
Indirectly, the Broker Dealer / RIA can benefit as well. When the primary policy triggers a higher (single) deductible for claims related to certain product sales, and the DRIP responds by paying the higher deductible, the firm and the Rep equally benefit. Each DRIP policy is underwritten on its own, designed to reflect the Reps obligations that arise from the Broker Dealer's primary policy.
This program is backed by the innovative leadership of North American Professional Liability Insurance Agency, LLC (NAPLIA), and insured by AIX Group a member of The Hanover Insurance Group (NYSE: THG), ranked amont the top 25 property & casualty insurers in the industry and is a Fortune 1000 company.
To learn more about this program please visit our dedicated website: deductiblesolution.com
Paul Smith, AIF 508-656-1315 PaulS@naplia.com