Banking,
9th U.S. Circuit Court of Appeals
May 6, 2020
Course correction on ‘Bankers Bond’ insurance policies
Despite the apparent clarity and simplicity of the insuring agreement, insurance companies have typically denied forgery claims made under these policies by ignoring the policy language and positing a hypothetical. Insurers typically argue that a bankers bond is not “credit insurance,” and then assert that if there had been no forgery, the lender would not be able to recover on the loan because the borrower had no collateral and insufficient collateral.
Banks and other financial institutions routinely purchase insurance to protect against forgery and similar risks. These insurance policies are known as "Financial Institution Bonds" or "Bankers Bonds." These policies typically insure lenders for losses directly resulting from the lender, having in good faith, extended credit in reliance on a forged security agreement, guaranty or similar document.
Despite the apparent clarity and s...
For only $95 a month (the price of 2 article purchases)
Receive unlimited article access and full access to our archives,
Daily Appellate Report, award winning columns, and our
Verdicts and Settlements.
Or
$795 for an entire year!
Or access this article for $45
(Purchase provides 7-day access to this article. Printing, posting or downloading is not allowed.)
Already a subscriber?
Sign In