Fracas Over Insurance on $2.4m Bank Breach – My Take

In the last several weeks I heard from many of you about a Virginia bank breach and the response from their insurer, ABA/Everest. The concerns are real. Let's see if we can add some light to the heat. Here is the original post. I have done some research. I have looked at policy forms by ABA/Everest and other insurers. I have talked with a few … [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...]

Cyber Insurance For Bankers Webinar Video

Here is the replay of my recent webinar on cyber insurance for bankers. … [Read more...]

Social Engineering Fraud Insurance

I have said it often - the bad guys are good at being bad. Time to check your bank's fraud-bond for an important new coverage, Social Engineering Fraud Insurance. Social engineering fraud is a game of deception - the bad guys convince a bank employee to transfer bank funds pretending to be a bank officer, a board member, an employee, or a … [Read more...]

Bank Fraud-Bond Misunderstandings… Servicing Contractors

In about half the small bank insurance programs I review I find that the fraud-bond has had coverage broadened to cover "Servicing Contractors." Most banks don’t need this coverage because they don’t use "Servicing Contractors" as defined in the bond. This from the ABA's coverage description: The Servicing Contractors Rider extends the … [Read more...]

CEOs Signing Insurance Applications

A bank client is in the final stages of changing insurance companies. The insurer wants a signed application. The CEO looks over the app. He is busy and trusts his CFO. He signs the document and moves on. Six months later a claim comes up. The insurer turns the claim down because there is a pertinent question on the application that was answered … [Read more...]

Safe Depository Coverage – Standard of Loss

Your bank customers expect that you will protect their property in your safe deposit boxes. You expect your insurance to help. Let's look at the fraud-bond (AKA financial institution bond or banker's bond) for coverage. There is usually a section called "Safe Depository." Safe depository coverage can be written in two broad ways: Liability … [Read more...]

Bank Teller Steals $2m

For all my bank clients who say they are too small and know their employees too well to have a big loss... I recently learned of an employee of a $300m bank who stole $2,000,000 over seventeen years. I can only imagine the heartbreak of the leadership of the bank when they learned of this - not just the loss, but the violation of trust. No … [Read more...]

Why Banks Hire Me By The Year

A bank-client called me today. An officer of the bank had falsified loan documents so that a report would not show the account as behind. He also failed to file reports on the loan - hiding the account. My client asked if this would be a dishonest act, causing problems for coverage if this employee embezzled in the future. Yep, this one is … [Read more...]

Overview of Bank Insurance in Three Minutes

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