Claim Scenario: The client instructed his broker to buy 15 units of a bond within her brokerage account. The registered representative’s assistant entered the trade amount in the trade system incorrectly which resulted in the purchase of 380 units. As a result, the trade had to be corrected 3 days later which resulted in a market loss for the client.
Estimated Claim Cost:
$20,000
Loss Prevention Tip: Check the work of registered assistants before
sending trade orders or distribution requests to insure accuracy (e.g., correct
account number; correct investment fund listed; correct number and amount of
shares to be purchased).
Errors & omissions claims
often result from errors made by support staff. Create a system of checks
and balances so that trade tickets and account transactions are monitored,
reviewed and verified for accuracy prior to execution. This will reduce the
likelihood of erroneous trades and prevent future claims.
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purposes only. The sources used are presumed accurate. CalSurance Associates,
Brown & Brown Program Insurance Services, Inc. and Brown & Brown, Inc.
will not be liable for any errors, omissions, losses, injuries or damages
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