The European Union’s adoption of General Data Protection Regulation (GDPR) is approaching and many Financial Institutions have questioned the application of coverage within their existing insurance policies.
As many are aware, the scope of the regulation is very broad and extends to protection of an EU citizen worldwide. In late May, the regulation will apply “to all companies processing and holding the personal data of data subjects residing in the European Union, regardless of the company’s location.”
There are many resources that have been published to assist with compliance and implementation, and we encourage our insureds to seek advice of counsel in the ongoing regulatory environment. It’s also beneficial to review risk management and guidance from local and national associations aligned with the interests of Financial Institutions.
The management liability policy has no territorial restrictions per se, and the Territory and Valuation section states: “Coverage under this policy shall extend to wrongful acts taking place or claims made anywhere in the world.” The policy also provides an outline for currency: “All premiums, limits, retentions, loss and other amounts under this policy are expressed and payable in the currency of the United States of America. If judgment is rendered, settlement is denominated or another element of loss under this policy is stated in a currency other than United States of America dollars, payment under this policy shall be made in United States of America dollars at the rate of exchange published in The Wall Street Journal on the date the final judgment is reached, the amount of the settlement is agreed upon or the payment of other element of loss is due, respectively.”
Most policies include an OFAC exclusion on the management liability policy, which includes EU and UK trade and economic sanction laws as well as the US. This exclusion prevents payment by the insurer where such payment would violate trade or economic sanctions.
The foregoing does not take into account a review of the entire policy, the applicable definitions, terms, conditions, exclusions , etc. The foregoing in no way alters, amends or otherwise changes the terms of any policies as issued or amended by the company. All claims are reviewed and adjusted based upon the characteristics, facts, and details provided at time of loss by our claims department.
Make Sure Your Financial Institution Clients Have the Right Coverage
Contact any one of the FI insurance experts below for help in making sure your FI customers have the right coverage from a strong, stable company!
|VP Sales and Distribution/Great Plains Region
|Great Lake Regions