When you handle the financial interests of businesses and individuals, you not only have to deal with hundreds of regulations but also the expectations of the client. While having professional liability for bankers can certainly mitigate the risks, it’s more important to be proactive in managing your liabilities. Know these common reasons clients sue to find ways to avoid opening your institution to risk:
- Acts of bad faith – the client accuses the lender of being unreasonable in a decision or acting arbitrarily
- Fraud – a lender makes a promise they can’t keep
- Duress – the client may accuse the lender of threats or unlawful acts
- Failure to fund
When you are familiar with these common liabilities, you can prevent many of them from occurring. Instituting best industry practices can keep your professional liability insurance claim history free and keep your premiums lower. Mistakes may happen. Customers may overlook a small mistake, but when miscommunications occur, they may feel betrayed and more likely to file a lawsuit.
Make sure you understand the limits of professional liability insurance for bankers to know what is covered under your policy and what isn’t. Reduce your risk of potential issues by working with your insurer to find ways to manage exposure and prevent claims.