Like any other professional organization that provides advice and services, a bank or lending institution is exposed to claims of liability from numerous fronts. A mistake—real or simply alleged—can lead to civil litigation and potentially devastating financial consequences.
Professional liability insurance for bankers, also known as errors and omissions (E&O) coverage, is designed to protect a lending institution and its employees from such claims. E&O insurance provides for payment of legal fees as well as any financial settlements or judgment, within the limits of the policy, that may be the result of a civil suit.
Comprehensive Coverage the Key
E&O insurance is designed to include comprehensive protection. Typographical errors, alleged mishandling of investment accounts, faulty counseling—all are covered by liability insurance for bankers.
Consider the anatomy of a basic loan—a process that is fraught with stress for the consumer and one in which any misstep can cause a heightened reaction. Professional liability protects the institution from claims of mistakes or omissions from start to finish during the life of the loan:
- Failure to properly explain loan terms during counseling
- Rate lock disputes
- Truth-in-lending inaccuracies
- Closing errors
- Underwriting mistakes
- So-called wrongful eviction and/or foreclosure
Customize Your Coverage
Bundle liability insurance for bankers with directors and officers insurance or purchase a stand-alone policy. An experienced broker can help you determine the limits of your coverage by assessing the scope of your institution.
