Like all corporations,
financial institutions require quality
insurance coverage to protect against legal
liability to other parties. Financial
institutions are vulnerable to litigation,
particularly because the high visibility, and
"public" nature of their business.
Lenders Financial Insurance Services works with
several leading insurance providers. We can
provide competitive quotes, supported by
discussion and debate, so that senior management is
thoroughly aware of the coverage.
Fortunately, with Insurers competing aggressively
for this business, premiums are likewise
competitive, and this amounts to good fortune
for financial institutions.
OFFICERS AND DIRECTORS LIABILITY
When corporations are sued, all or some of the
Directors and Officers may be implicated. In today’s
litigious society, the spiraling cost of litigation
alone can substantially impact the institution’s
Due to their high-ranking and highly visible
positions within the institution, Directors and
Officers have enormous exposure to their own
personal financial loss, in the event of legal
claims against the corporation.
- Derivative Claims
- Violations of Federal and state securities
- Mismanagement of the financial institution
- Discrimination, Harassment, and wrongful
- Breach of Fiduciary duty
- Deceptive Trade Practices
- Loss of opportunity for growth and profit
- Conflict of interest
As D&O coverage provides protection from outside
the corporation, Bond provides protection from
financial loss caused within the institution.
EMPLOYEE PRACTICES LIABILITY
Employee practices claims are disruptive to any
organization. Employee Practices Liability (EPL)
protects financial institutions against loss, in the
form of damages and defense costs,
which result from employee practices disputes.
Defense costs often exceed the actual settlement
Today, a growing number of employees are
cognizant of the issues of sexual harassment age
discrimination, and other "barriers", whether legal
or illegal. As a result, Harassment charges have
increased 200% in the past 20 years.
EPL protects the financial institution, and its
employees, from claims alleging wrongful
employment practices, including:
- Wrongful dismissal
- Violation of employment discrimination laws
- Sexual or other workplace harassment
- Wrongful deprivation of a career opportunity
In addition to having the proper insurance
coverage, a financial institution should also
periodically review its employee practices
procedures. Fortunately, most Insurers (that offer
EPL coverage) offer assistance in creating,
evaluating, and updating these procedures.
In short, the best deterrent to employee
practices claims is to have proper internal
procedures…with frequent review of them.