Is Your Settlement Insured? The Wrong Words Can Prevent Coverage

In the current climate of zealous regulators bringing countless securities investigations,how your financial institution chooses to “speak” in reaching a settlementmay have serious implications on your insurance coverage. The tiniestsyntactical misstep in a settlement may sound the death knell for your claim.In stipulating to a binding settlement agreement, look for two classic redflags in the proposed language: (1) “disgorgement of profits” or “ill-gotten gains”and (2) “fines” or “penalties.” In both cases, you can lose insurance coverage.