Your D&O Insurer Might Be Scouring Your Call Report Looking to Cancel Coverage
Is your Directors & Officers Liability policy “cancellable”? The answer is “it depends”! Is that surprising? Well, if your agent is experienced in the forms used by the company, it definitely shouldn’t be!
The attached article from January 24th, 2010, courtesy of FinCri Advisor, explores this particular aspect of D&O policies geared toward financial institutions. And while the tone set by the publisher makes the companies to sound somewhat underhanded and devious, they’re really not! The wording is right there in the policy and addressed in minute detail!
At FNBB Insurance Agency, we represent almost every carrier who has the capability to write quality financial institution insurance. Out of all of them, only TWO have a non-cancellation clause in their form. In case you’re wondering, those two include One Beacon Insurance Group and The Travelers. And if you’re on a multi-year (pre-paid) program, then that group is narrowed to one: One Beacon Insurance Group.
Does that make the other carriers “bad choices” for your insurance program? Not at all. Each has advantages and disadvantages and should be evaluated overall for their structure and ability to protect your bank.
There are many aspects to consider when choosing not only your insurance carrier, but also your agent. If the subject of non-cancellation (along with many other nuances of the program) is not discussed, then we invite you to give us a try!
Your D&O Insurer Might Be Scouring Your Call Report Looking to Cancel Coverage |
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Privacy Exposure Can Be Made Public
Attached is a November 2009 article from Community Bank Magazine addressing the issue of “privacy” as a viable exposure to community banks.
In the past, D&O policies were not structured to pick up coverage for issues related to “privacy”. Only with the advent of the Internet Liability / Cyber Liability policies did we really begin to see protection available for this avenue of risk. And much the same as when they were first introduced, privacy coverage under these policies remains (as a rule) limited to that contained within the systems of the bank.
So what happens when the bank is faced with issues such as “dumpster diving” or stolen laptops containing confidential information? Unless your program has been specifically structured, then you may be facing an uncovered claim.
At FNBB Insurance Agency, privacy coverages are always identified and addressed. Unique offerings from many of our carriers allow banks to extend their coverage to include not only losses from violations of privacy, but also such things as associated expenses to handle these events.
Review your current program and ask your agent about privacy. If you don’t, your current exposure to privacy violations may be made very public!
Paper Documents Pose Risks |
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2008 D&O In Review
With the sweeping changes in the banking market over the past couple of years, I thought it would be interesting to take a second look at the D&O survey as reported by Towers Perrin for 2008. They do a fine job of reviewing such indicators at increase/decrease of limits and retentions, purchase of coverages, etc. Unfortunately, there weren’t as many banks participating as I had hoped. In fact, it appears that they had less than 25 respondents, and some of those were obviously larger publicly-held institutions. However, I thought it may be of interest to those of you following the D&O marketplace and decided to include here for your review!
http://www.towersperrin.com/tp/getwebcachedoc?webc=USA/2009/200908/DO_Survey_Report_2008_FINAL.pdf |
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Navigating the Pitfalls of D&O Liability Insurance
If you’re a client of FNBB Insurance Agency, this article will make sense! It highlights a number of areas that are always discussed when we work with you on your D&O program. For example, this article mentions Third Party Harassment on the Employment Practices Liability Insurance; what defines a claim (oral demands vs. legal proceedings); the availability of tail coverage; claims-made vs. occurrence forms; and more.
No article on D&O can fully hit the full spectrum of issues related to a bank’s program, but it is refreshing to see the writer emphasize the importance of the “little things”!
Navigating the Pitfalls of D&O Liability Insurance |
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Economic Downturn Fuels EPLI
This will sound very familiar to our clients. EPLI is extremely important and perhaps even more so in an economic downturn. In the financial institution arena, there truly are very few bankers who fail to purchase this coverage. With rate softening and the broadening of the EPLI wording, it has become much easier to obtain coverage. This should be interesting reading for all HR managers and insurance decision-makers alike!
2009-07 Economic Downturn Fuels EPL |
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Looking for Trouble
Well, we’re almost exactly one year past the writing of this March 2009 article from Best’s Review. I thought it interesting to do a bit of “looking in the rearview mirror” relative to financial institution D&O insurance.
There are two things to consider when reading this article. First, there is a tendency to lump all “financial firms”, public and private, together when speaking about availability and rating for D&O policies. Second, there are statistics noted that are taken from the 2007 D&O Survey from Towers Perrin. As you may have seen in a previous entry, there were truly very few community banks that responded to the survey!
So, when taken in context, what do you get from this (admittedly “dated”) article? To me, it’s the placement of importance on the insurance coverage for community bankers. No insurance vehicle that protects your institution or your board should be taken lightly. And that mentality is NEVER outdated!
Looking for Trouble |
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