There are financial institutions operating today that doesn’t fully understand the need for banker professional liability (BPL) coverage, which means they may not have this vital coverage in their insurance program. Even more surprising, there are insurance brokers who claim to be skilled at helping to structure insurance programs for financial institutions don’t factor in BPL coverage, leaving financial institutions without necessary insurance coverage.
There are certain issues that should be considered when adding any coverage to an insurance program, whether buying stand-alone insurance or adding important coverage to a policy already in the insured’s program. FGIB Bankers Professional Liability Insurance safeguards banks and other lending institutions against many risks and exposures common in the finance industry.
Why every financial institution needs BPL coverage
The professional services provided by financial institutions are known to be a cause of concern since mistakes or errors can result in a financial loss injury to the clients and customers they serve. A professional liability policy serves where a commercial general liability (CGL) policy or a standard directors’ and officers’ liability (D&O) policy won’t address the issue at hand.
Let’s say, for example, that a financial institution is presented with a claim by one of its customers alleging that the bank mistakenly, and unbeknown to the customer, allocated one of the customer’s intended deposits to the wrong account. This sort of mistake can result in a variety of financial problems for that customer. The customer, therefore, sought damages for the financial injuries it suffered.
The officer for the bank mistakenly thought the claim would be covered by its CGL policy. However, the claim did not involve any damage to or loss of use of tangible property, so the property damage coverage offered under the CGL policy would not apply in this case.
The foregoing example demonstrates the need for BPL coverage. There are a number of other issues to consider and there are several knowledgeable insurance brokers that have a true understanding of these concerns and applicable risks. That said, financial institutions that buy FGIB Bankers Professional Liability Insurance should do so with an understanding of the different issues that should be covered when adding this coverage to their insurance program.