Financial Institution Insurance for Banks, Credit Unions and Savings & Loans
It’s important for banks, credit unions and savings & loans to have Financial Institution Insurance to protect against risks particular to their operations. These include General Liability Insurance, Errors & Omissions Insurance, Workers’ Compensation Insurance, Business Auto Insurance, Property Insurance and Crime Insurance.
- Banks conduct the business of banking, which includes holding current accounts for customers, protecting their customers’ funds, paying checks drawn by customers and collecting the checks that customers deposit into their accounts. Banks may also lend money to their customers by making account advances and providing loans or offering other forms of lending. Banks and other financial institutions are federally regulated.
- Credit Unions are non-profit financial institutions that are owned and controlled by their members, all of whom are shareholders of the institution. Members of credit unions can have access to low-interest loans as well as other services provided by banks and other financial institutions, such as holding checking and savings accounts and transferring funds.
- Savings & Loans primarily store their customers’ funds in savings accounts and certificates of deposit and provide mortgage and real estate loans for noncommercial entities. They may also offer the common services of banks and other financial institutions including checking accounts and the transferring of funds.
Premises liability lawsuits could occur in financial institutions if customers sustain injuries on the business’ properties. For example, visitors to the business could trip/slip/fall on in parking lots and inside buildings from poorly maintained grounds, such as unsafe floors, elevators, stairs, parking lots and sidewalks. Such accidents can result in injuries that require costly medical services including surgery and rehabilitation for which your organization would be liable.
Also known as Professional Liability Insurance, E&O Insurance protects financial institutions and individuals against claims made by clients for inadequate work or negligence. Mistakes made by employees resulting in lost funds to customers could also result in liability for the financial institution. E&O insurance often covers both court costs and any settlements up to the amount specified on the policy.
Workers Compensation risks for banks, savings & loans and credit unions are the same as other office environments such as slips/trips/falls, repetitive motion injuries, electrical shocks, shelving collapse, falls from stools and step ladders, and back injuries. For instance, Workers’ Comp would cover the medical costs incurred and lost wages of an employee who strains his or her back lifting heavy files.
Auto liability risks exist if the financial institution owns or possesses automobiles and for non-owned vehicles used for business purposes. For example, accidents can occur when employees run business errands, make sales and service calls on larger clients, or when traveling for training and continuing education classes.
As with any business, there is always a potential for vandalism and theft at banks and other financial institutions. Likewise, fire or severe weather can cause damage to property, such as hail damage to a roof or a fire from a lightning strike. Vehicles can also cause damage to the building or ATM machine while moving through a drive-thru lane.
As establishments that keep large amounts of money and valuables on hand, there is a high risk of loss due to theft by employees and others. Employee theft and computer fraud losses can be quite expensive.