What does Lenders Liability Coverage mean? Read on to discover the definition & meaning of the term Lenders Liability Coverage - to help you better understand the language used in insurance policies.
Lenders Liability Coverage
Provides coverage for errors and omissions (E&O) arising out of the extension of credit by financial institutions. For example, a bank could be held legally liable if it agreed to provide a line of credit for a business firm, then failed to honor the agreement, causing the firm to experience financial difficulties. Another instance in which a bank can incur lender liability occurs when, under a loan workout agreement, a bank takes managerial control of a company and as a result of mismanagement causes the company to sustain additional losses.
We hope the you have a better understanding of the meaning of Lenders Liability Coverage.