Pub. 15 2020-2021 Issue 2

NEBRASKA BANKERS ASSOCIATION 17 Since 1857, Cline Williams has devoted attention to the unique needs of the banking and nancial services industries. Since then, we have provided our clients with the resources they need in the areas that are most important to them – from lending and collections, to regulatory compliance, to mergers and acquisitions, and so much more. We’re more than a law rm. We’re a partner for your bank. | | | | | federal or state laws that are in place to protect borrowers for il - legal lending practices. Even if the bank does everything right, the bank risks a jury empathizing with the borrowers rather than the lender, given banks continue to face an ever-increasing regulatory and public perception challenges. Here are a few items to review and consider: 1. What is the insurance carrier’s definition of lender liability? 2. How many days are required to put a carrier on notice after discovering a potential matter? 3. Are the directors, officers, employees and bank enti - ties covered? 4. Will a paid claim under the lender liability endorsement reduce the future limit for other insuring agreements within your D&O policy? 5. Is it the banks or insurer’s duty to defend? 6. In the event the insured wants to settle a claim, but the bank does not agree to the terms, will the bank be respon - sible for a part or all future defense expense and settlement (Hammer Clause)? 7. Does the lender liability insuring agreement cover com- plaints brought by guarantors and third parties? 8. Does the lender liability insuring agreement include coverage for loan participations? 9. Is the lender liability limit adequate compared to the bank’s legal lending limit and exposure?  Want to know more? Contact Mitch Florea with Nebraska Bankers Insurance and Services Company (NBISCO) at the NBA for a comprehensive discussion and review at mitch.florea@nebankers.org or 402-904-7014. Information for this article was gathered from Insurance Institute of America (IIA) and American Bankers Association (ABA). Even if the bank does everything right, the bank risks a jury empathizing with the borrowers rather than the lender, given banks continue to face an ever-increasing regulatory and public perception challenges.