DEFINITION of 'Bankers Professional Liability (BPL) Insurance'

Financial protection for financial professionals against customers’ claims of wrongdoing. Bankers professional liability insurance is a type of errors and omissions insurance that protects those who work in the banking industry and the institutions they work for from the expenses associated with defending oneself in a lawsuit or paying a judgment if a plaintiff wins.

BREAKING DOWN 'Bankers Professional Liability (BPL) Insurance'

The term “banker” is broad in this context; bankers professional liability insurance may cover escrow agents, tax planners, financial planners, estate planners and more. Bankers liability insurance can cover directors, officers, full-time, part-time and seasonal workers in these professions.

A bank could be sued for a breach of duty, misleading statement, incorrect statement or other mistake related to its deposit, brokerage, insurance, real estate, credit card or other services. For example, a customer might sue a bank for honoring a fraudulent check or fraudulent wire transfer that caused funds to be erroneously removed from the customer’s account.

Bankers professional liability insurance does not cover fraudulent or dishonest behavior, deliberate violations of laws or other criminal acts. It also does not cover claims that are pending at the time the policy is taken out, nor does it cover libel, slander, defamation or invasion of privacy.

Bankers can purchase professional liability insurance policies tailored to the unique risks they face. For example, an investment banker would want coverage for underwriting, syndicating, securitizing and market-making activities, while a lender would want coverage for its activities related to granting, committing to, restructuring or terminating loans and lines of credit.

Some policies allow banks to choose their own legal defense, should the need arise; in other cases the insurance company will provide the legal defense. If the insurance company determines that a settlement is preferable to a trial and the insured refuses the settlement, coverage for trial expenses may be limited to the proposed settlement amount.

RELATED TERMS
  1. Liability Insurance

    Any type of insurance policy that protects an individual or business ...
  2. Business Insurance

    Business insurance coverage protects businesses from losses due ...
  3. Cover Note

    A cover note is a temporary document issued by an insurance company ...
  4. Blanket Contractual Liability Insurance

    Liability insurance that provides coverage for all contracts ...
  5. Directors And Officers Liability ...

    Directors and officers liability insurance covers you if you're ...
  6. Casualty Insurance

    Casualty insurance is a broad category of coverage against loss ...
Related Articles
  1. Insurance

    Do You Need Casualty Insurance?

    Find out how different types of coverages can protect you and which policy is right for you.
  2. Insurance

    Insurance Coverage: A Business Necessity

    Don't go to work without this policy in place - especially if your work is in your home.
  3. Financial Advisor

    What Kind of Insurance Do RIAs Need?

    Advisors spend a lot of time discussing insurance with clients but they also need to consider their own coverage needs as small-business owners
  4. Personal Finance

    What personal bankers do – and how much they make

    Discover the job duties and typical salary of a personal banker, and identify the education and skill set needed to be successful in the field.
  5. Personal Finance

    What do investment bankers really do?

    Investment bankers are essentially corporate financial advisors who help companies manage the process of raising financing for their activities.
  6. Personal Finance

    Is a Career in Investment Banking Worth It?

    Discover why many finance professionals are wondering whether an investment banking career is worth it. Consider the challenges of this profession.
  7. Insurance

    What is Underwriting?

    Underwriting is a term most often used in investment banking, insurance and commercial banking. Generally, underwriting means receiving a remuneration for the willingness to pay for or incur ...
  8. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
  9. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
RELATED FAQS
  1. What is the difference between legal liability and public liability?

    Discover the differences between a general legal liability, a specific public liability and a professional indemnity in the ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. Can companies insure their accounts receivable?

    Understand what credit insurance is and how it protects companies against payment problems they may encounter in trying to ... Read Answer >>
  4. How much do changes in interest rates affect the profitability of the insurance sector?

    Learn about the relationship between interest rates and insurance company profitability, and how interest rates can affect ... Read Answer >>
Hot Definitions
  1. Intrinsic Value

    Intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including ...
  2. Bubble

    1. An economic cycle characterized by rapid expansion followed by a contraction. 2. A surge in equity prices, often more ...
  3. Swap

    A swap is a derivative contract through which two parties exchange financial instruments, such as interest rates, commodities, ...
  4. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  5. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  6. Risk Tolerance

    The degree of variability in investment returns that an individual is willing to withstand. Risk tolerance is an important ...
Trading Center