In response to the increasing complexity of community banking, the American Bankers Association-sponsored insurance program, underwritten by Progressive Casualty Insurance Co., has released a new directors and officers/company liability policy for financial institutions.
The new policy allows bankers to protect the directors, officers and the bank itself against exposures arising from the many services they now provide, under either a broad-form contract or on an individual-named-peril basis.
Since the Gramm-Leach-Bliley Act of 1999, community banks have ventured into activities well beyond the traditional banking arena.
“Bankers are not only concerned about depositor and lender liability, but they also are looking for broad coverage for all their professional services,” said John Wells, director of Progressive’s professional liability group. “They also now understand that a significant number of lawsuits are coming from third parties, which aren’t typically covered under the policies in today’s market.”
The policy continues to provide a special “non-erosion” feature that ensures that coverage is available to protect directors’ and officers’ personal liability, even if claims reach coverage maximums in suits against the bank itself.
“As coverage for the bank itself is expanded, we wanted to make sure that personal liability of the bank’s directors and officers is also covered,” said John Manor, chairman of the American Bankers Professional and Fidelity Insurance Company – the mutual owned reinsurer for the ABA-Sponsored Insurance Program. “This unique non-erosion feature is critical protection for anyone that works in the bank or sits on its board.”
The policy has been approved in most states and is available through independent agents. For more information, visit www.banks.progressive.com.
The American Bankers Association membership includes community, regional and money center banks and holding companies, as well as savings associations, trust companies and savings banks.
The American Bankers Professional and Fidelity Insurance Company is a banker-owned, mutual insurance company that reinsures coverages underwritten by the Progressive Casualty Insurance Company in Mayfield Heights, Ohio.
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