Insurance Coverage for CFPB Investigations and Enforcement Actions

Many companies and individuals that are facing investigations or subsequent enforcement actions by the Consumer Financial Protection Bureau (“CFPB”) will be forced to incur substantial sums to defend such claims, to settle such claims, and/or to pay any judgments. In many cases, companies and individuals may have insurance coverage to pay for such costs, such as Directors and Officers liability insurance (“D&O Policies”) and Errors and Omissions liability insurance (“E&O Policies”). The availability of coverage will turn on the specific contract language in any insurance policy and the specific nature of the CFPB matter at issue.

Policyholders that are potentially subject to CFPB investigations should:

- Review the terms in their current insurance policies and potentially seek to negotiate enhancements to coverage during their next renewal cycle.

- When faced with a CFPB investigation, take prompt steps to provide appropriate notice to insurers in order to preserve their rights to coverage.

- Be prepared to contest attempts by insurers to deny or limit coverage for CFPB investigations.

Please see full alert below for more information.

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Topics:  CFPB, D&O Insurance, E&O Insurance, Insurers, Investigations, Loss Coverage, Notice Requirements

Published In: General Business Updates, Consumer Protection Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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