What is Financial Institution Liability?
Financial Institution Liability Insurance is a specialized package policies designed to defend and indemnify financial institutions against claims alleging negligence of errors and omissions in performance of profession. These policies can include directors and officers liability, employment practices liability, professional liability, fiduciary liability, bankers bonds, and data breach coverage to tailor coverage for the unique variety of exposures faced by these institutions on a daily basis.
Why Have Financial Institution Liability Insurance?
The financial industry is always changing and evolving to keep up with changing times, customer needs, and new technology. To stay competitive, many financial institutions are introducing a large range of new services that go beyond what is expected with more “traditional” banking operations. With this amount of change happening in the industry, new potential risks are evolving as well. Financial institutions such as banks, trusts, credit unions and many others need specifically tailored insurance policies to protect them from these risks.
Financial Institution Claims Example
Nancy alleged that Fred, her financial advisor, failed to effectuate any contributions to her retirement plans over a four year period and that she did not obtain the employer match that was available for these periods. Nancy also alleged that the mutual funds in her account were not actively managed and that several investments selected by the Fred were illiquid and inappropriate given her time horizon and risk tolerance. She sought unspecified monetary damages. The case was settled for nearly $120,000.
Coverage May Include:
Provide insurance coverage to defend and indemnify financial institutions against claims alleging negligence of errors and omissions in performance of profession. Other essential liability coverages include:
- Directors and Officers
- Employment Practices
- Ransom and Bond
Financial Institution Professional Liability Applications: