Coverage for Subprime Lawsuits

Risk Management

PUBLISHED ON: December 3, 2008

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The subprime mortgage collapse and the resulting bank failures and market loss is clearly the most important riskvent of 2008. Lawsuits have already begun against virtually anyone involved in the securitization of mortgages.  Many of those lawsuits may be covered under standard insurance policies already purchased prior to the financial crisis that may cover costs of defending the lawsuits and costs of settlements or judgments in the lawsuits. Depending on the case, coverage may be found in directors and officers (D&O) insurance, professional liability (E&O) insurance, fiduciary liability insurance or financial institution bonds.