Investors will lose even more by suing insurers
Don’t expect to see too many cases of New Zealand investors suing insurance companies when financial advisers and the companies they recommend go bust, according to a broker specialising in professional indemnity (PI) insurance.
Fenton Green & Co Director Drew Fenton was commenting on a NZ High Court test case decision in which exclusions in a QBE policy were upheld.
Two investors claimed a financial adviser failed to exercise proper care, leading to an investment loss of more than $NZ300,000 ($239,000). Two of the recommended companies failed, and so did the financial adviser.
The adviser’s PI policy had an exclusion which meant it would not cover the adviser if recommended companies went into liquidation.
The investors spent an estimated $NZ80,000 ($63,700) on a test case to see i
Fenton Green & Co Director Drew Fenton was commenting on a NZ High Court test case decision in which exclusions in a QBE policy were upheld.
Two investors claimed a financial adviser failed to exercise proper care, leading to an investment loss of more than $NZ300,000 ($239,000). Two of the recommended companies failed, and so did the financial adviser.
The adviser’s PI policy had an exclusion which meant it would not cover the adviser if recommended companies went into liquidation.
The investors spent an estimated $NZ80,000 ($63,700) on a test case to see i