Civil money penalties are fines levied against directors and officers. These fees are for an alleged wrongdoing. Coverage for these fines is a policy that directors and officers purchase. The point of this coverage is to cover individual liability rather than the bank’s liability. Civil money penalty liability insurance is still necessary and this is the reason why.
CMP on the Rise
Civil money penalties have been on the rise. The fees continue to grow and as they grow, bank officials are vulnerable. The majority of lawsuits filed result in the bank officials having to pay penalties. When insured, the majority of fees are paid through funds reserved by the insurance.
Protection Always Necessary
There is never a good reason not to have insurance. No one wants to think that they are going to have to deal with penalty fees or lawsuits. In the banking industry, however, you need to protect yourself. While some choose to save money by foregoing insurance, the truth is that it costs them more in the end when they have to pay out of pocket for claims against them.
If you’re worried about civil money penalties, then it’s time to invest in civil money liability insurance. When it comes to the directors and officers of banks, the majority who choose this insurance coverage do not have to pay penalty fees.