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Welcome to the FNBB, Insurance Agency, LLC Library. This section contains articles that have been published through other sources that we feel have important information for our customers. Please click on the article title to view.
The article from Independent Agent magazine (July 2012) provides interesting reading on the subject of Directors and Officers Liability. Although it does reference issues associated with community banks (regulatory bodies and related exposures), it admittedly also focuses on public, private AND non-profit boards and protection. However, I noted the following in the article:
“69% of respondents reported receiving an inquiry from their board ... regarding the amount and scope of the D&O insurance protecting them against potential litigation.”
“... less than half (47%) of the respondents had conducted an independent review of their D&O policies in the past two years..”
“As directors get more educated about the insurance, they quickly learn there is no standard, off-the-shelf policy in the market.”
This seemingly is a constant when it comes to these articles on D&O insurance. In layman’s terms, it seems to always say that boards acknowledge that:
“We’re not sure what we have and we haven’t had anybody review it to see if it’s right, but we know that there’s not a one-size-fits-all for what we’re doing!!!”
Unfortunately, the truth is that the majority of bank insurance programs we review contain unnecessary restrictions, missing coverages, limits that are either too low or wrapped up in such a way that any one loss takes away insurance for every other exposure, and language that leaves the bank to the whims of the underwriter. And in some aggravating cases, the D&O insurance structure was simply unimaginably negligent. I’m not kidding. One recent example of a bank program revealed that no coverage existed for ANY claim against the bank itself! Can you imagine?
Great leaders are those that delegate tasks such as this to the right partners. Want to know if there is room for improvement in your bank program? Give us an opportunity to meet for a few moments and determine whether FNBB Insurance Agency is a partner suitable for that role!