Operators of financial institutions know a thing or two about errors and omissions (E&O) coverage. An E&O policy covers your financial institution in the event that a customer or stakeholder claims that you were responsible for failing to provide a service, or provided a service that did not have the expected or promised results. Professional Liability Insurance for Bankers will also provide counsel for legal claims asserting that an act of professional negligence was committed.
Most E&O policies cover judgments, settlements and defense costs. Even if the allegations are found to be groundless, you could easily end up in debt for thousands of dollars needed to defend the lawsuit. This can certainly bankrupt a smaller company or individual, and will often have a lasting impact on the bottom line of many larger companies addressing these same issues.
Not all the risks covered
Most professional liability insurance policies are structured to meet the specific needs of that particular business. The policy provides protection against third-party liabilities arising out of the provision of its professional services. Such liabilities arise from breach of agreed investment parameters or management contracts, perceived under performance, lack of due diligence prior to investments, alleged dishonest acts of employees, incorrectly executed trades, or failure of internal risk control. Up to the policy limit, you should be covered for errors and omissions made by the insured professionals, and that includes defense costs, judgments and settlements.
What you will not be covered for is intentional wrongdoing or harm, including dishonest, fraudulent, criminal, or malicious acts or omissions. Coverage is voided if any illegal acts or willful violations of any state regulation are committed by an insured. This is also true if there is evidence of gaining any personal profit to which the person or persons were not legally entitled, ERISA violations, employment practices violations, or any actual or alleged bodily injury, sickness, disease, death, or damage to or destruction of, any tangible property.
Professional Liability Insurance for Bankers can be tailored to meet the specific needs of each insured, including for many newly emerging risks arising from technology startups. Speak to an agent about any concerns your organization may have.