Financial Institutions face a myriad of risk management challenges. They can run the risk of a claim emanating for anything from global and local economic issues, regulatory compliance, internal employee misconduct, executive liability as well as technology system attacks. Banks and financial institutions must balance profitability and risk exposure and in order to do so they need to maintain Bankers professional liability coverage to address these concerns.
Local insurance agencies are ready to serve commercial banks, credit unions, investment banks, broker dealers, business development corporations, private equity funds, mortgage companies and consumer finance organizations so that they have the needed protection in place. They can also provide risk management expertise focused on delivering the positive financial impact desired, while also navigating a complex and evolving industry.
The purpose behind errors & omissions (E&O) liability insurance
An E&O policy covers your financial institution in the event that a customer or stakeholder holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results. Most E&O policies will cover judgments, settlements and defense costs.
Even if the allegations are found to be groundless, you could still wind up spending thousands of dollars to defend against a lawsuit. These settlements can easily bankrupt a smaller company or individual and may have a devastating effect on the bottom line of many of the larger institutions that provide financial services.
While you’re liability policy will cover most errors and omissions that may cause issues with clients, there are certain restrictions as to what will be covered. This includes intentional wrongdoing or harm, such as dishonest, fraudulent, criminal, or malicious acts or omissions, illegal acts, which includes willful violations of any state or regulation committed by an insured, attributable to such gaining any personal profit to which they were not legally entitled.
In addition, ERISA violations, claims brought or maintained by an insured under the policy, actual or alleged bodily injury, sickness, disease, death, or damage to or destruction of any tangible property-, and any actual or alleged employment practices violations or liabilities assumed under contract. Speak to an agent familiar with Bankers professional liability coverage about the needs of your financial institution.