In the scenario of Fraudulent Advice & Employee Absconding, where an employee of a financial advisory firm deliberately provides fraudulent investment advice and subsequently absconds, a standard Professional Indemnity (PI) policy would typically respond. Coverage may be triggered under the “Employee Dishonesty” or “Fraud” extension of the policy, potentially indemnifying the firm for:

– Legal liability arising from the client’s financial loss,
– Defence costs associated with the ensuing lawsuit, and
– Any settlements or judgments, subject to policy limits and applicable exclusions.

We recommend reviewing the specific policy language and endorsements to confirm the extent of coverage and any reporting requirements.