Is Your Bank Sufficiently Covered?

If your job includes buying insurance for financial institutions, you need to consider a few points. Your agent may not be aware that customers generally hold banks and other firms that handle capital to a higher standard than most other types of businesses. When your customers suffer any financial loss, they typically will stop at nothing to recover their money. The financial institution is a prime target when losses occur as the victim searches for any way to recover their damages. Your existing Directors and Officers (D and O) policy may not be enough to protect your organization from ruin.

Whether your organization did anything wrong or not, the cost of defending a lawsuit can be monetarily devastating. Even if the court exonerates your organization, you will still have to pay court costs. In the event you were in the wrong, restitution and damages can drain your assets. Ask your agent about the availability of insurance for financial institutions and if you could add it to your existing coverage. Depending on the situation, you may have to purchase an entirely new policy to give your bank’s assets enough protection to weather the storm of a lawsuit. Taking charge of other people’s money is a business that is fraught with risks, so make sure you have the protection you need to be there when your customers need you.

Frank