Bankers, mortgage brokers, and other professionals who take on fiduciary responsibilities to people or corporate entities have unique liability exposures. In some ways, the risks they encounter professionally are similar to those encountered by doctors and lawyers, whose work also affects the course of entire lives. Like those other careers, though, financial professionals need very specific coverage that speaks to the exact nature of the sensitive information they handle and the decisions they make on behalf of others. That’s why it’s essential to be sure you are carrying enough coverage.
Evaluate Your Professional Insurance Policies
Mortgage errors and omissions insurance is designed to cover the common risks faced by professionals who act as the go-between, finding mortgage providers for buyers who need homes. Those risks include bad faith actions by employees and agents of your company, as well as the usual range of accidental omissions and oversights that could potentially cost your clients money. Similarly, other financial professionals need their own coverage packages that protect them from the specific kinds of omissions and errors commonly found in their roles within the industry. If you’re buying for a financial institution with staff in many roles that need this coverage, it’s a good idea to work with insurance providers who know how to craft specialized coverage to suit each one.
If you work in the financial industry, you are probably aware of the great risks that deal with theft, fraud, cybercrime, employee dishonesty, and compliance with government regulations. No doubt you carry a banker’s professional liability insurance policy to help defray the costs associated with claims in these areas, but all too often it takes an experience of loss to understand how the policy works. Here are two common claims brought against banking professionals.
A borrower is told by the loan officer that the loan request will be funded. The borrower makes business plans and purchases according to the verbal guarantee, yet subsequently, the loan is denied. The borrower files suit against the loan officer and company for damages and lost business opportunities.
Professional Services Liability
A bank employee transposes numbers on the ACH transactions for a merchant account, causes funds to deposited to the wrong account. The business receiving the funds withdraws them and refuses to return them when the bank notices the error. The client that did not receive the deposit sues the bank for the loss.
In order to protect your company from losses related to these situations and others, the information found at https://www.fgib.com advises that a strong professional liability policy be taken out for the institution. The financial costs of legal action can be damaging to your company, as well as the resulting loss of business from client mistrust.