The 2008 global financial crisis had far-reaching effects still felt today in many financial institutions. Not only did regulations change, but the industry itself felt a wave of distrust at all levels from businesses and individuals alike. Civil money penalty liability insurance is now something all banks should consider for the added protection.
When a bank director or officer potentially does something wrong, regulators impose fines and bring civil monetary penalties against them. These fines may be against the institution, the individual or both.
As the years pass in the wake of the crisis, the number and amount of civil money penalties against bank directors and officers have risen. Bank officials may experience an expensive fine imposed against them that continues to grow. With coverage limits up to $250,000, most fines imposed are covered.
Lawsuits continue to come in against bank officials, but with the introduction of CMPs has addressed many of them to a satisfactory conclusion. Banking institutions are slowly rebuilding the trust they had by following the regulatory guidelines and paying the fines as they come up.
Protecting your bank officials with civil money penalty liability insurance helps protect them in the event of a lawsuit. Mistakes happen and the directors and officers insurance rider offers additional protection as the industry changes.