Not A Big Deal, Until It Is… Valuable Papers

After a fire standard property insurance will pay for the value of the paper in your file cabinets...  So, for every file cabinet you have your insurer will buy you two boxes of copy paper. Cool! Until you realize you need the information that was on those pieces of paper. That is what is called Valuable Papers. Valuable papers insurance … [Read more...]

Banks Need To Review Websites for ADA Compliance

This will be my third post on this topic... Here is the last one from December of 2016 which references my post of January 2016. Well, boys and girls, it is still happening.  A law firm hires a disability advocate to visit your website. They find it to be non-compliant with the Americans with Disabilities Act.  You get a letter threatening … [Read more...]

Your Insurance Agent Is a VIP (Vital Insurance Partner)

My friend Howard Candage taught me that the most important part of the insurance transaction is the relationship an insurance buyer has with his or her insurance agent. Having the right agent is critical to a successful insurance program. There has to be trust and respect between the two parties. Your relationship with your agent has to be as … [Read more...]

Chubb Insurance Pulls Back From Insuring Banks

I have heard now from two sources that Chubb Insurance is pulling back from providing community banks with management liability, directors and officers, financial institution bond, and related insurance coverages. The reports are that the insurer is not canceling policies but pricing renewals so to be uncompetitive. Also, no new banks are being … [Read more...]

To Keep or Not to Keep, That is the Question! Insurance Policy Retention

A bank client wrote me recently and asked how long he should keep insurance invoices, claims info and policies.  Here is my advice: Hi Brad, I'd keep invoices and claims records as long as you keep other expense records.  Claims that involve litigation should be kept as long as your attorney tells you to keep the info. The standard … [Read more...]

Corporate Indemnification Protects Officers and Directors

Your directors and officers are absolutely, positively, undeniably, indubitably, unequivocally, irrefutably dependent upon the quality and breadth of the provision of your bylaws that deals with indemnification. When was the last time your corporate attorney reviewed that provision? If more than three years talk to your attorney soon. … [Read more...]

Beware of Coinsurance

Coinsurance is a penalty provision found in most property insurance policies for underinsurance. It never helps you. It can only hurt at the time of a loss. Example – Underinsured Building With Coinsurance Property value: $1 million 80 percent coinsurance clause (requires the purchase of $800K of insurance) Amount of insurance: $750K Amount of … [Read more...]

Common Bank Insurance Mistakes – Missing Entities

In about half the insurance reviews I do for banks, I find entities missing from the coverages. Some insurance policies require that entities be listed on the policy for coverage to apply. Some banks have real estate operations or mortgage operations that are separated legal entities. Many community banks manage charitable foundations. These all … [Read more...]

How Much Insurance Should Your Bank Buy

The tenth edition of my recommended minimum limits of insurance for banks is now available. Go Here To Download Your Copy. The most common questions bankers ask me is, "Do we have enough insurance?" Another version is, "How much insurance should our bank buy?" The question is largely unanswerable as we have no idea of the size of … [Read more...]

Fraud-Bond: Fraudulent Loan Collateral

There is no coverage in a financial institution fraud-bond for a fraud loss where the fraud is in the determination of the value of the collateral. You take a loan secured by inventory, and it turns out there is no inventory. No coverage. Example: ABC Bank and Trust loans money to an electrical parts supplier. They take inventory in a warehouse as … [Read more...]