Why Your Banks E&O Policy Is Not Enough
Financial institutions are subject to more regulation, oversight and scrutiny than virtually any other business organization. Since bank employees are not perfect, your company carries an errors and omissions policy. This coverage provides general protection for your entity. It does not, however, indemnify directors and officers from civil monetary penalties they receive individually following a regulatory investigation or audit. Fortunately, you can add coverage for civil monetary penalties in a standalone policy.
Analyzing the Limits of an E&O Policy
E&O policies are great for general coverage. By law, though, they cannot indemnify bank leaders from personal civil monetary damages. A stand-alone CMP policy can. With a good policy, directors and officers are covered for the policy amount for any penalty they receive individually. The bank leader must purchase this policy personally.
Working With the Right Provider
To fully protect your bank, you need sufficient information from a skilled professional. By working with an insurer who understands the financial sector and its potential pitfalls, you can likely protect everyone who works inside your organization.
Meeting customer demands requires having bank employees willing to go the extra mile. To give your directors and officers the confidence they need to do their jobs, purchasing coverage for civil monetary penalties is often an effective strategy.