Financial institutions have a distinct set of needs when it comes to insurance coverage. Financial institution insurance available to banks is meant to address the specialized aspects of these institutions.
Insurance and risk management solutions for financial institutions have evolved significantly over the past several decades. Financial institution insurance policy providers have had to change their policy offerings to stay in line with new emerging risks, tightening regulations and changing market complexities.
The switch from brick and mortar banking to online banking has brought about the most significant changes. Cyber exposure has necessitated the emergence of insurance that mitigates the risk of cybercrimes.
Bank insurance coverages a unique range of risks specific to financial institutions. As risks change and cybercrimes become more prevalent, insurance companies adjust to the changing tides.
- Mortgage impairment – This type of coverage guards a bank’s collateral interest in real property.
- Risk of physical loss or damage to cash and securities – Banks need protection against loss while assets are being transfered or when they are stationary.
- Safe deposit box liability – This type of liability insurance covers customer claims of negligence while the customer’s property is stored in a bank vault.
- Master trust – This is similar to a group homeowners’ policy. It protects real property when a bank is serving in a fiduciary capacity as a trustee of the property.