New Markets

Bankers’ Professional Liability

Nuts & Bolts: The Chubb Group of Insurance Companies has developed an errors and omissions insurance policy for large financial institutions. BPL for Financial Institutions addresses traditional banking exposures, but can also respond to emerging fee-for-service exposures.

The securities broker dealer endorsement provides insurance for misleading sales practices and documents, improper advice, “unsuitable” customer products, inadequate disclosure, failure to execute trades properly and conflicts of interest. The insurance agents or insurance brokerage endorsements insures for conflicts of interest, misleading sales practices, improper coverage advice, errors in placing insurance overages and in determining proper coverage or coverage limits, and failures to report all insureds to the carrier. The lending liability endorsement provides insurance for breach of contract, violations of the Truth in Lending Act, failure to grant an approved loan, interference with a customer’s business, and wrongful foreclosure on a loan or repossession of collateral. The data processing services endorsement provides protection for errors in coding or in routing processed checks.

The policy also offers the following coverage highlights: Definition of “customer” includes the named beneficiary of any account held by the organization’s trust department who is entitled to receive professional services; Expanded definition of “insured persons” includes directors and officers, full-time, part-time, temporary, leased or seasonal employees, and volunteers. Coverage extends to the assets of spouses or domestic partners of insured persons; Punitive or exemplary damages are insurable where allowed by law. The policy is non-cancelable, except for nonpayment of premium. BPL for Financial Institutions is designed for institutions with more than $3 billion in total assets.

Dollars: Primary aggregate limits reach $15 million. Excess limits of up to $10 million are available in layered programs of $100 million. Deductibles typically exceed $100,000. Premium varies by risk.

Carrier: Chubb rated “A++” by A.M. Best, both admitted and nonadmitted.

States Available: Chubb has obtained rate and form approvals in 43 states and awaits approvals in five.

Contact: Vic Stewman, (404) 266 4181 or vstewman@chubb.com.

Excess Liability Coverage

Nuts & Bolts: AIG Excess Casualty, a division of American Home Assurance Co., has introduced xsInResponse to provide excess liability coverage for risks previously covered by an insurance carrier that is now insolvent. Available as an endorsement to AIG Excess Casualty’s commercial umbrella liability policy, Umbrella Prime, xsInResponse allows policyholders to reduce insolvency-related vulnerabilities in excess liability insurance programs dating back up to 15 years. xsInResponse coverage responds to incurred but not reported claims. UmbrellaPrime, available with up to $50 million in limits, also includes crisis management funds, access to professional expertise and immediate, 24/7 access to specialists who can help companies manage a crisis, even before a claim is filed.

Dollars: xsInResponse endorsement to commercial umbrella – $50 million in available limits, $1 million trailing SIR, no minimum premium.

Carrier: Underwritten through AIG Excess Casualty, xsInResponse is a non-admitted endorsement.

States Available: All.

Contact: Richard Tallo, (212) 458-6104 or richard.tallo@aig.com.