ABA Insurance Services Rolls out Enhanced D&O Liability Coverage

For over 30 years, the ABA-endorsed insurance program has been supporting financial institutions by providing insurance that continuously evolves in step with the banking industry to better meet their coverage needs. To keep pace with today’s litigious environment, ABA Insurance Services has developed a Directors & Officers Liability (D&O) policy to protect financial institutions and their directors, officers and employees more effectively against alleged and actual professional liability related claims.

Modified and Updated Coverage Features
To meet the needs of today’s financial institutions, the policy includes:

  • broadened coverage for directors and officers, including a non-rescindable Side A
  • an A-B-C format—individual Side A, company Side B and company securities Side C
  • Reputational Expense coverage for crisis expenses incurred by the Company or a Director or Officer in response to a catastrophic event
  • fiduciary penalties, including under HIPAA and Affordable Care Act
  • whistleblower and regulatory coverage
  • conduct-based exclusions only apply upon a finding of a “final, non-appealable adjudication”
  • notice of claim necessary only upon discovery by an executive officer
  • Shareholder Demand Investigative Coverage
  • emotional distress and mental anguish coverage included in:
    • Lender Liability
    • Bankers Professional Liability
    • Broad Form Company Liability
  • lending discrimination
  • definition of Defense Costs includes both e-discovery consultant fees and costs
  • deletion of collusion exclusion

Wealth Management Endorsement
Based on banker feedback, the Wealth Management Endorsement was created to better address the needs of trust companies and financial institutions with large trust departments.  A two-fold liability endorsement covers both trust services and brokerage/advisory services, eliminating the need for separate endorsements, and allowing dedicated coverage for trust departments.

Additional Enhancements
Qualified banks are eligible for the following policy enhancements:

  • variable separate Side A limit options
  • employment practices third party discrimination coverage
  • employment practices workplace violence coverage
  • endorsement available for retention reduction
  • an unlimited extended reporting period for retired or resigned directors, officers and upper management members
  • D&O extradition, deportation and assets seizure coverage
  • pre-claim investigatory costs coverage
  • applicable policy modifications for large and/or publicly traded financial institutions

“We see firsthand the stress and disruption that come with professional liability lawsuits, especially those hitting banks,” according to John N. Wells, President and CEO of ABA Insurance Services. “In some cases, it can be very personal and if your D&O policy isn’t up to date with the nuances of a lawsuit, that only aggravates the situation…and you. It’s our hope to alleviate the burden in some way with these updates and enhancements.”

For more information about how this new D&O policy can benefit you and your bank, contact or have your insurance agent contact your ABA Insurance Services’ underwriter at 800-274-5222 or marketing@abais.com.