When refer to insurance for banks, they are usually talking about the FDIC, the government agency that insures depositors’ funds up to $100,000. What about the banks themselves? The business of banking is risky. Banks hold other peoples’ money and often transact complex financial deals in the course of a normal day. When something goes wrong, and it happens sooner or later, banks can face substantial liability. Anything that allegedly causes another person to lose money can be brought to court. Expenses can quickly mount up even if the court rules in favor of the banking institution. When the plaintiff proves that the bank was at fault, the court can potentially award huge amounts of money in restitution and punitive damages. In the case of a smaller institution, this scenario could portend the end.
Insurance for banks can help alleviate such dire consequences. Insurance companies can customize a plan that will meet the need of just about any sized bank. Sometimes, insurance riders added to the existing policy provides enough coverage for smaller banks. The insurance company will normally write separate coverage for midsize and larger banks so that adequate protection can be guaranteed. The depositors can rest easy knowing that their money is safely insured while in the bank, and now the bankers can relax as well.
A new generation of customers is emerging with different expectations from financial institutions. There is a world that exists almost entirely online. Younger generations are moving in this internet-based world and expect to be catered to in this new environment. The internet opens many doors to banking options that were not available only a decade ago. The demand for online banking has increased ten-fold.
This paradigm shift is changing the risk landscape for banks. Technological advances are changing the way financial institutions interact with customers. Insurance for banks is having to shift to keep up with the new risks presenting themselves. Insurance companies are rolling out plans that cover the risk of losses from cyber intrusions. Cyber risks are now one of the top concerns for banks.
The best approach for financial institutions is to develop and implement a multi-pronged method to comply with new regulations and manage risks. Banks need to take measures to stay abreast of the complex and changing issues of the day. It is imperative that insurance for banks cover any missteps or data breaches that might occur.
As times change so do customers. This new generation is demanding that banks have a bigger presence online. Entering the cyber world opens these institutions of the different kinds of risks. Banks need to manage these new risks appropriately and make sure their insurance policies are up to date.
Banking institutions are certainly no strangers to the breadth and scope of risks they face, especially in today’s business environment where they face much stiffer competition than in years past along with more stringent regulations than ever before. Yet as these lending institutions continually adapt to the changing needs of their operations and services in order to stay ahead of the curve, they could face certain risks, which could also be compounding their vulnerability to a wide variety of financial threats.
There are many unknown perils that may lurk over the horizon, while daily issues such as employee theft and even common slip and fall claims work to hurt a bank’s reputation as well as their bottom line. In times like these, it’s important to have a stable, experienced insurer in your corner that understands the ins and outs of your institution’s operations and can provide the right type of Insurance for Banks designed to fit your needs, both basic and complex.
Tailored insurance solutions you can depend on
Your insurer’s job is to provide you with a well-rounded insurance program that can both protect your operations and help you manage the costs associated with claims, lawsuits, and situations resulting in a loss of stability. The right insurance agency will aid you by providing property and casualty policies with the capacity to help streamline the insurance process for you. In doing so they will also help you avoid the complications of dealing with multiple insurers.
Protecting your operations property should be among their chief concerns. For example, a fire could damage or destroy your institution’s buildings, and the cost of reconstruction could include meeting newer building ordinances. Naturally, your insurance will pay the replacement cost to rebuild the building, including the cost to comply with ordinances or laws, up to the policy limit. But you will also benefit from having business income and extra expense coverage in case a catastrophic storm wreaks havoc on multiple branch locations, causing the closure of one or more branches, perhaps for weeks or longer.
You will likely want to purchase an all-risk property / business income perils insurance policy that helps to protect you from the impact of lost revenue. There are other products available that might also fit your needs, including Professional Liability for Banks, Cyber Liability, Crime, D&O, and Employment Practices Liability Insurance, among others. Speak to an agent about Insurance for Banks and get the type of coverage that you benefit from the most.