Bankers PL

Nuts & Bolts: The Chubb Group of Insurance Companies developed an errors and omissions insurance policy for large financial institutions. BPL for Financial Institutions addresses traditional banking exposures, such as the taking of deposits and loan making, but can also respond to emerging fee-for-service exposures. BPL for Financial Institutions provides customers with several options to address emerging fee-for-service operations.

Coverage options include: Securities broker dealer endorsement provides insurance for misleading sales practices and documents, improper advice, “unsuitable” customer products, inadequate disclosure, failure to execute trades properly and conflicts of interest; Insurance agents or insurance brokerage endorsements insures for conflicts of interest, misleading sales practices, improper coverage advice, errors in placing insurance overages and in determining proper coverage or coverage limits, and failures to report all insureds to the carrier; Lending liability endorsement provides insurance for breach of contract, violations of the Truth in Lending Act, failure to grant an approved loan, interference with a customer’s business, and wrongful foreclosure on a loan or repossession of collateral; Data processing services endorsement provides protection for errors in coding or in routing processed checks.

The policy also offers these coverage highlights: Definition of “customer” includes the named beneficiary of any account held by the organization’s trust department who is entitled to receive professional services; Expanded definition of “insured persons” includes directors and officers, full-time, part-time, temporary, leased or seasonal employees, and volunteers. Coverage extends to the assets of spouses or domestic partners of insured persons; Punitive or exemplary damages are insurable where allowed by law. The policy is noncancelable by the insurer except for nonpayment of premium. BPL for Financial Institutions is designed for institutions with more than $3 billion in total assets.

Dollars: Primary aggregate limits reach $15 million. Excess limits of up to $10 million are available in layered programs of $100 million. Deductibles typically exceed $100,000. Premium varies by risk.

Carrier: Chubb rated “A++” by A.M. Best, both admitted and nonadmitted.

States Available: Chubb has obtained rate and form approvals in 43 states and awaits approvals in five.

Contact: Vic Stewman, (404) 266 4181 or vstewman@chubb.com.