More (Though Not New) Thoughts on Bank Civil Money Penalties Insurance

A client asked about my knowledge of the history of civil money penalties against bank board members. The question was prompted by a note I sent about AmTrust's CMP insurance policy. My Reply: CMP against banks seems to be mostly for issues of lack of flood insurance on loan collateral that is in flood areas. CMP against directors is exceedingly … [Read more...]

Is Your Bank Covered For Cyber Fraud?

My latest article for Banking Exchange...  E-Banking insurance issues are by far the most common question-topic I get from bankers.  Cyber liability insurance, cyber crime, e-hacking, etc. The arms race that is computer security goes on and on. As your fraud prevention systems get better, the bad guys get better at being bad. Your insurance must … [Read more...]

AmTrust Offers FDIC-Friendly Civil Money Penalties Cover For Banks

I got word yesterday that AmTrust is now offering a stand-alone Civil Money Penalty (CMP) insurance policy for banks. -Coverage is applied for by the individual director or officer. -Coverage is paid for by the director or officer. -Bank is referenced on the policy but only to define the activities covered for the individual.  The bank is … [Read more...]

End of the World Insurance

I call excess side A coverage on directors' and officers' insurance policies, "end of the world insurance." Your company's by-laws includes an indemnification agreement that says that the company will pay for any litigation against a director or an officer over their service as a Director or Officer. (Note: There are legal restrictions on what … [Read more...]

Civil Money Penalty Insurance

Since the FDIC came out with their October 2013 letter clarifying/trashing the use of insurance to protect bank directors and officers from civil money penalties there has been a great deal of heat generated by discussion.  Not much light - lots of heat. About two years ago I saw the whole thing coming and started telling my bank clients to … [Read more...]

Banks In Trouble Find It Hard to Get Sound Insurance

A bank client shared some info that the FDIC is looking to warn banks that there are exclusions in some bank directors' and officers' insurance for regulatory issues. My experience is that these exclusions are almost always only on banks with regulatory issues. In general, insurers are not looking to sell insurance when the chances of a claim are … [Read more...]

Notary Public Professional Liability Insurance Banks

A client sent me the following questions about notary public professional liability insurance: Are employees who perform notary services for bank customers insured against errors they make?  Would that fall under Professional Liability coverage, or is it a specialty insurance? My reply: When they are performing services related to their … [Read more...]

Professional Liability Lawsuits

The FDIC regularly updates its list of lawsuits against bank directors. Ugly, ugly, ugly! Authorized Bank Directors & Officers Defendants Authorized in 2009: 11 Authorized in 2010: 98 Authorized in 2011: 264 Authorized in 2012: 369 Authorized in 2013: 316 January 2014: 13 (so far) Total 1,071   See the press release here. … [Read more...]

Intro to Fiduciary Liability Insurance

The fiduciary liability insurance policy is an important - though rarely used - business insurance policy. Claims are infrequent. When they do happen, hang on to your hat. Fiduciary liability insurance protects the administrators of your employee benefit plan from lawsuits alleging a violation of ERISA. ERISA calls your administrators … [Read more...]

Bankers Service on Nonprofit Boards

What if you get sued for a decision you make while serving as a director of a local charity? Service on nonprofit boards is certainly common for community bankers. What insurance protection is provided by your bank’s current directors' and officers' insurance for your nonprofit service? Sample Policy Sections Most banks buy directors' and … [Read more...]