Securities Liability

Securities Liability protects against losses resulting from Wrongful Securities Acts, which are defined as any actual or alleged omission, error, misstatement, misleading statement, neglect or breach of duty, which in whole or in part is based upon, arises from, or is a consequence of the purchase or sale of, or the offer to purchase or sell, any securities issued by the financial institution.

Sample Endorsement
Coverage Summary

Claims Examples
  • Following a regulatory examination citing poor loan quality and a subsequent external audit, a bank is required to restate earnings. The restatement indicates that the bank’s financial condition is significantly worse than initially reported. A group of shareholders files suit against the bank and the board of directors alleging fraud and negligent oversight. While depreciation in value of securities due to market fluctuation unrelated to any Wrongful Act is not covered, defense costs incurred to defend the bank and directors are covered.
  • Coverage is available as part of the Broad Form Company Liability endorsement; or as a separate endorsement to the D&O Policy.
  • Coverage applies to all state and federal securities laws (not just the Securities and Exchange Act of 1933).
  • Coverage includes the Insured Company's public offerings, private offerings, going public or private transactions, and initial and subsequent stock offerings.

Notwithstanding any language to the contrary, nothing contained herein constitutes nor is intended to constitute an offer, inducement, promise, or contract of any kind. All coverage descriptions and claims examples are provided for informational and educational purposes only and are not a representation as to coverage for any particular claim and are not represented to be error free. Coverage for any claim is determined upon the specific facts of the claim, the terms and conditions of the policy and applicable law. For details on the coverage provided by your specific contract of insurance, please refer to your policy. Coverage is subject to underwriting guidelines and may not be available in all states. Limits may be capped for underwriting reasons. Any links to any sites which are not originated by ABA Insurance Services Inc. (ABAIS) are provided only as a courtesy and are not intended to nor do they constitute an endorsement by ABAIS of the linked materials.