In the corporate world, unrestricted exchanges of money or investments can lead to unethical transactions that take advantage of unassuming clients or corporation. The government has established the Securities and Exchange Commission to keep a watchful eye on all trading between investors to make sure financial activities are honest and legal. If a claim of illegality arises, an investigation may open and lead to consequences of civil money penalties (CMPs).
Not only do investors in the corporate world deal with CMP’s, but healthcare agencies can also be found guilty of fraud and abuse for their transactions with Medicaid and Medicare funding. A CMP is any sort of monetary fine for regulatory infractions levied against an individual affiliated with the transaction or an institution itself.
There are insurance policies available to assist with the resolution of claims and judgment resulting in the assessment of civil money penalties. These policies are for individual directors, who made found liable in certain instances of wrongdoing. Currently, individuals can be found liable for up to $181,000 per violation, while a company can be held for up to $905,000 per violation.
The government is working to raise the limits on personal and institutional liability. Securing an insurance policy designed to address civil money penalties is one way to keep directors and administrators financially protected if a claim arises.