For banks under regulatory oversight, Business Risk Partners (BRP) is now offering professional and management liability protections for distressed community banks, including hard-to-find Regulatory Defense Cover for directors and officers as a result of regulatory proceedings and investigations.
While the economy has shown signs of rebounding, bank closing have continued unabated. Indeed, last Friday bank failures reached a milestone with closings for 2010 beating the number of banks shut down last year and representing the most ever in a single year since the savings-and-loan crisis two decades ago.
One out of every 11 banks is on the FDIC problem list and the number of “problem institutions” is at its highest in 17 years. The banks that have failed this year are smaller, on average, than those that succumbed in 2009. Community banks comprise over 95% of US banks.
“Regulatory coverage is scarce for banks under orders from the FDIC right now. Distressed banks are hit with the ‘double whammy’ of having difficulty affording coverage, and seeing premiums increase ten-fold due to the current regulatory climate. With coverage getting stripped down to bare bones, the right coverage can be very hard to find. BRP’s new products were developed to address those gaps,” says Lisa Doherty, president of the Windsor, CT-based managing general agency focused on specialty commercial insurance.
Designed for troubled institutions and backed by an A-rated carrier, BRP’s suite of products includes directors and officers, employment practices, bankers bond and professional liability, regulatory defense cover and fiduciary, all in one package.
Coverage is available for community banks, regional or single branch operations across the country, with no asset size restrictions. OTC public company banks will also be considered. BRP can write both primary and excess coverage. With $5 million of capacity for each line, there is potential to build up to $20 million in aggregate limit.
Basic coverage and enhancements include:
• Directors and Officers: Ensures individual executive and institutional protection.
• Employment Practices: coverage against all types of employment claims, as well as claims of harassment or discrimination brought by customers.
• Bankers Professional Liability: Customizable coverage to protect the myriad of services banks provide everyday such as wire transfers, tax or financial planning, electronic data processing, as well as coverage for Trust departments.
• Blanket Bankers Bond: Covers a variety of employee and third-party criminal acts, customizable for exposures unique to banks: ATM, Safe Deposit Box, and Stop Payment Order as examples.
BRP also offers the following sub-limited coverages:
• Regulatory Defense Cover (for D&O only): Includes regulatory proceedings or investigations for Side-A & B, providing this valuable coverage for the individual directors & officers.
• Wage and Hour Defense: Offers defense coverage for violating the Fair Labor Standards Act.
• Fiduciary: Designed to protect administrators of employee benefit plans from risk of ERISA violations.
• Lenders Legal Liability: For protection from loan origination, credit reporting, loan restructuring or transfer as well as repossession or foreclosure.
Source: Business Risk Partners
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