As insurance goes, errors and omissions coverage for financial institutions are fairly modern. Most people are familiar with malpractice insurance for doctors and lawyers. This concept of professional liability insurance has spread to include other professionals like financial institution workers and the institutions themselves. A bankers liability policy protects your financial institution in the event that a customer or patron holds you responsible for not delivering the expected or promised results. They are suing you for the services you provided or failed to provide.
Most policies cover settlements, judgments and the cost of defense. Lawsuits can be expensive, even if you ultimately win. Smaller companies can easily go bankrupt, and it can financially ruin an individual. A lawsuit can even have a lasting effect on the bottom line of larger institutions. Errors and omissions insurance helps provide much-needed protection.
Policies can be made to accommodate the unique situation of particular professional and financial institutions. It does not cover criminal acts or deliberate wrongdoing. Banks face types of claims. They may be sued for anything from unfair loan terms and discrimination to mis-selling and wrongful foreclosures. Rates are based on several factors including associated risks and policy limits. If you own a financial institution or are a professional banker, you should consider a bankers liability policy. It can easily be added to an existing coverage plan.