All businesses need to carry some type of liability insurance. Certain liability policies, such as that concerning employment practices, are fairly standard with any kind of business. Most coverage, however, is industry specific and should be provided by a carrier who understands your specific type of business. If you are seeking insurance for financial institutions, you will probably need policies that provide employment practices liability (EPL) as well as directors & officers (D&O) liability, bankers professional liability (BPL) and errors & omissions (E&O).
EPL insurance provides coverage against claims of wrongful termination, discrimination, harassment and retaliation. It covers you in case of a lawsuit brought against your institution. D&O liability insurance protects you in policy-related disputes. This can include issues with shareholders, failure to establish or properly enact a corporate policy or failure to comply with the guidelines of the Securities and Exchange Commission. BPL insurance for financial institutions covers mistakes such as misrepresentation of services or failure to disclose the risks involved in a customers investments, whereas E&O coverage deals with instances where accounts have been mishandled through bad sales tactics, discrimination or omission of vital information. Both BPL and E&O cover the costs of legal fees and any settlement that is owed.
Proper liability coverage is necessary to protect the assets of your financial institution. It is important to make sure you have the right policies to meet your specific needs.