Insurance Against Errors or Omissions for Directors and Advisors of CSS will Cost them $2.4 Million

The Social Security Fund (CSS) plans to contract an insurance policy with coverage of up to $15 million annually for three consecutive years to address claims related to errors, omissions, and decisions made by senior officials during the performance of their duties.  The investigation would cover 70 people within the institution’s management structure. The list is headed by the CSS Director General, Dino Mon, and also includes 49 national directors and deputy directors, two advisors to the Director General, and the 18 members of the Board of Directors. 

This aims to protect staff against claims related to culpable acts, management errors, breach of fiduciary duty, omissions, inadequate supervision, and unintentionally incorrect statements.  The policy would have a validity of 36 months and a reference price of $2.4 million.  The contract is recorded in Report DNFAS No. 782-2026, a document whose authenticity was confirmed to news media.  According to the report, the so-called “Directors, Deputy Directors, Board Members and Advisors to the General Management Insurance Policy” seeks to protect the institution and its officials against legal actions arising from the exercise of management and administrative functions.

The coverages provided include the protection of the insured’s assets , defense expenses, lawyers’ and experts’ fees, investigation costs, legal expenses, and compensation arising from claims filed against the covered officials.  The policy also covers legal defense costs, even when there is no determination of liability, as well as claims arising from decisions or actions taken during the performance of administrative functions.  One of the most relevant aspects of the document is that it includes coverage for compensation arising from claims against insured public servants as a result of erroneous acts committed in the exercise of their duties, in addition to the expenses associated with their defense.

Million-Dollar Distribution

According to the report, the sum insured would be $15 million per year of coverage, under a single aggregate limit scheme. The CSS itself later clarified that the total projected coverage would reach $45 million over the three-year term of the policy, while the estimated cost of contracting remains at $2.4 million.

‘It’s Nothing New’

When consulted by the media, the general director of the CSS, Dino Mon, maintained that this hiring does not constitute a new or exclusive measure of the institution, but an obligation provided for in the Organic Law since 2005.  Mon stated that this type of policy is used by other state entities and is part of the risk management mechanisms contemplated for institutions that manage public resources or make decisions with an impact on third parties.  “It’s the policy taken out by the National Bank (Banco Nacional), the Savings Bank (Caja de Ahorros), the Panama Canal Authority (ACP), and other institutions.  

It has been in the law since 2005.  It’s nothing new; I don’t know what the issue is,” he said.  He also noted that the coverage is intended to address potential harm to third parties and not to directly benefit officials.  “This is in the law. It must be contracted. It is to compensate the affected third parties, not the Caja officials.”  Mon indicated that the contract is based on the legal provisions that regulate the powers and responsibilities of the board of directors and the general manager regarding the contracting of insurance and institutional protection mechanisms. 

He added that, according to current regulations, it is the responsibility of the general manager to handle the initial hiring and its periodic renewals, while coverage is established based on the responsibility inherent in each position.  In a statement released later, the CSS defended the contract and assured that the policy “does not constitute a privilege for officials” nor is it intended to protect acts of corruption, fraud, illicit enrichment or any malicious conduct.  The institution justified that it is a risk management mechanism that seeks to prevent potential civil claims from impacting resources allocated to medicines, medical care, pensions, infrastructure and health programs.

Three-Year Contract

The CSS has already begun the contracting process, and the bidding is currently in the pre-qualification phase. Six companies interested in the process participated in the meeting held on June 9th. According to the report, the winning company must have the backing of international reinsurers and meet the minimum risk rating requirements established by the institution.  The policy would cover the years 2026, 2027 and 2028, with a budget allocation of $800,000 per year, for an estimated total of $2.4 million.

Documentation sent by the CSS director to the news media to review indicates that it is the responsibility of the general director to contract and renew the coverage and management bonds for public servants and members of the Board of Directors.  The document is dated April 9, 2026 and appears to be signed by the national executive director of Finance, César Herrera, and by Mon.  In the justification for the contract, the CSS points out that the policy seeks to strengthen the institutional governance framework, the responsible management of risk and the legal protection linked to the exercise of managerial functions within the entity.  Following the publication of the information, the CSS informed the media that Mon will record a video to explain the scope of the policy and the legal foundations that support its contracting.