Progressive Release New D&O/Company Liability Policy For Financial Institutions
Changing Banking Environment Leads To Increased Need for Insurance Flexibility
MAYFIELD VILLAGE, Ohio — July 7, 2005 —In response to the increasing complexity of community banking, Progressive Casualty Insurance Company (Progressive), underwriter for the ABA-sponsored insurance program, has released a new D&O/Company Liability Policy for Financial Institutions. The new policy allows bankers to protect the directors, officers and the bank itself against exposures arising from the many services they now provide, under either a broad-form contract or on an individual named peril basis.
Since the Gramm-Leach-Bliley Act of 1999, community banks have ventured into activities well beyond the traditional banking arena. John Wells, director of Progressive's Professional Liability Group said: "Bankers are concerned about not only depositor and lender liability, but are looking for broad coverage for all their professional services. They also now understand that a significant number of lawsuits are coming from third parties, which are not typically covered under the policies in the market today."
The policy continues to provide a special "non-erosion" feature that ensures that limits are available to protect directors' and officers' personal liability, even if claims are paid for suits against the bank itself. "As coverage for the bank itself is expanded, bankers want to know that their own personal liability is covered," said Tom Walden, community bank specialist, Insurance Alliance in Houston, Texas. "Non-erosion of their limit of liability is key."
"I'm in constant discussions with bankers regarding new subsidiaries and services they are offering," said Walden. "The new Progressive product provides me the flexibility to select coverages currently needed for these services, while providing broad coverage for new services that may be contemplated in the future. And at the end of the day, I can reassure the bankers that their personal coverage is not compromised."
The policy has been approved in most states, and is available through independent agents. For more information, contact Judi Kovach at (800)274-5222, or visit www.banks.progressive.com.
The Common Shares of the Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. Progressive Casualty Insurance Company consistently receives an A+ (Superior) rating from A.M. Best Company, an independent firm that rates the financial strength and performance of insurers. A+ is one of the highest ratings available and assures consumers of the relative strength and stability of the insurer.
According to A.M. Best, a superior rating is assigned to companies that have, on balance, superior financial strength, operating performance and market profile when compared to the standards established by the A.M. Best Company. These companies, in the opinion of A.M. Best, have a very strong ability to meet their ongoing obligations to policyholders.
For more information about A.M. Best and Progressive's rating, visit ambest.com.
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