Financial Services

Deep expertise and experience to guide financial institutions

Our Financial Services practice takes a specialized approach to help financial institutions navigate the complex challenges facing the industry today. With dynamic solutions for consulting, insurance, and risk management, our experts are uniquely equipped to meet the needs of a broad range of financial institutions, including banks, hedge funds, and Fintech companies.

The industry is transforming at a rapid pace thanks to growing client needs, constant advances in technology, and increasingly rigorous regulatory requirements. Our team offers an all-inclusive view of the risks and strategic needs of an ever-changing sector, drawing upon our industry-leading analytics and deep breadth of expertise to help our clients meet their goals.

Financial Services Industry Solutions

Risk Strategies offers a wide scope of competitive, value-driven, industry-focused solutions and products to meet the specific needs of banks, asset managers, insurers, and other financial institutions, including:

• Consumer Financial Services: Including, but not limited to, collection agencies, non-traditional lenders, consumer finance companies, and others
• Banks and Non-Bank Lenders: Including large money centers, community banks, mortgage brokers, leasing companies, and asset-based lenders 
• Insurance Companies
• Asset Managers: Including registered investment advisors, mutual funds, hedge funds, private equity, and security broker/dealers
• Fintech
• Other Non-Traditional Financial Firms

What is D&O Insurance?

D&O or Directors and Officers Insurance is liability insurance primarily designed to protect a company’s executives, such as its directors or officers, from personal losses if they are sued by third parties for actual or alleged wrongful acts while acting in their capacity as directors or officers of the company. Depending on the policy, there may also be insurance coverage for the company’s own liability exposures. In public company D&O policies, such entity coverage is typically limited to Securities Claims.

What is the core purpose of D&O Insurance?

The core purpose of D&O Insurance is to provide financial protection for a company’s managers and board members against the consequences of actual or alleged “wrongful acts”, including actual/alleged errors, omissions, misstatements, or breaches of duty, when acting in their insured capacities.

What is Fiduciary Liability Insurance?

Fiduciary Liability Insurance is designed to protect organizations from claims of mismanagement and legal liability arising out of their roles as fiduciaries in the design, management, and administration of corporate pensions, savings, profit-sharing, employee benefits, and health and welfare plans. A Fiduciary Liability Insurance policy protects the personal assets of trustees/fiduciaries that manage employee benefit plans.

What if there is an error in administration or processing of a company sponsored plan?

Claims alleging negligent errors in the administration of a Plan are typically covered under a Fiduciary Liability policy (e.g., handling paperwork and records for the Plan).

Do crime policies cover company employees if they travel to client locations?

Crime policies often include a Client Coverage Insuring Agreement, which covers direct loss of money, securities, or property sustained by a client resulting from theft or forgery committed by company employees, not in collusion with such client’s employees.

What are the average costs of an Employment Practices Claim?

The average cost of defending and settling an EPL claim is $160K across the country but in more litigious states, it’s a lot higher. In California, it’s typically more than double this amount.

What type of litigation are related to 59% of all securities fraud settlements?

Event-driven litigation is related to 59% of all securities fraud settlements. For example: #MeToo, COVID-19 litigation, opioid litigation – the McKesson settlement.

What was the increase in SPAC related securities class actions in 2021?

Claims rose six-fold from 2020. There were 32 filings last year, as SPAC exposures continue to increase. SPAC mergers in the US doubled in 2021, raising a combined $95B for 2020 and 2021. Multiple exposures are at risk from mismanagement, fraud, misrepresentation, breaches of duty, or disclosure violations.

Is cyber insurance coverage available with D&O insurance?

D&O Policies can provide limited, separate coverage for cyber-attacks, and in the current climate, it is recommended that cyber also be endorsed on the policy. Although the market is tightening and the cost is increasing, the additional value it provides has proven to be beneficial in mitigating cyber risk.

What are the top 4 major risks D&Os have identified as being of greatest concern and need for D&O insurance coverage?

1. Cyberattacks
2. Data loss
3. Regulatory risk
4. Employment claims

Connect with us today and get a specialist approach to your D&O risk.