Individual Protection for Bank Directors and Officers
Financial institutions typically have insurance policies that can help protect the business and its investments when claims are filed against them, but these policies may not extend full coverage of protection to directors or officers of a bank. In these situations, bank directors and officers should look into civil money penalties insurance. This coverage provides extra protection if they are named in a lawsuit, personally or alongside their business, and there is a risk of paying fines related to the case.
Benefits of Civil Money Penalty Insurance
Civil money penalties insurance is purchased by the bank employee, covering their personal liability in case of a claim. Since the policy is under the employee’s name, the policy can even extend protection coverage over any bank boards they lead. Other benefits of a thorough CMP policy can include:
Deductibles that can be as low as $0
Increased chances of resolved lawsuits
Coverage of any penalties or fines
This insurance, however, does not cover court costs that can occur during a claim. Financial institutions guarantee that they will have a safety net of policies to protect themselves in case of a lawsuit, and those who manage a bank, should consider investigating the ways to protect themselves as well.