Management Liability for Financial Institutions

Protection for financial institutions: Addressing current and emerging risks

In an ever-evolving regulatory landscape coupled with market fluctuations and an expanding, more diverse (and oftentimes, more litigious) client base, financial institutions need to maintain proper safeguards to protect their business. Financial institutions are constantly under immense scrutiny from:

• Regulatory agencies and enforcement bodies
• Aggressive plaintiff’s bar
• Shareholders
• Employees
• Creditors
• And other stakeholders and interested parties

Specialty risk solutions for financial institutions

Risk Strategies has assembled a team of specialists who will help you strategically understand your firm’s total cost of risk — factoring in your firm’s own risk appetite, tailored peer group benchmarking, and much more.  As a specialty broker who understands the financial institutions' sector and its unfolding liability landscape, we can make recommendations and help lead a productive conversation with your board and legal counsel on appropriate types and quantities of insurance to make them comfortable.  Clients value our decades of experience placing Directors & Officers programs and claims assistance, which help them achieve their business goals.

What is Directors & Officers (D&O) liability insurance?

Directors and Officers (D&O) liability insurance protects the personal assets of directors and officers from potentially crippling financial loss in the event of a legal action brought against them in their respective capacities. The D&O policy also provides coverage for the organization when the entity is named as a defendant or target, or when the organization is required to indemnify a director or officer for a covered wrongful act.

Why should a financial institution buy D&O insurance?

Whether you are a financial advisor,  investment fund, commercial banking institution, investment bank, insurance company, or non-depository institution (leasing company, title agency, collection agency, REIT, mortgage broker, or finance company), structuring the proper D&O insurance program will effectively:

• Protect your company’s balance sheet
• Protect individual directors and officers personal assets
• Attract and retain talented leadership
• Allow you to focus on your business

What are some possible key exclusions I should be aware of in D&O policies?

• Adjudicated fraud or illegal personal profiting
• Professional liability
• ERISA matters (with exceptions)
• Claims by Insureds against other Insureds (with exceptions)
• Pollution and environmental matters
• Contract exclusion
• Bodily injury/property damage (other than personal injury for employment matters)
• Claims by major shareholders
• Pending or prior litigation