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

[Read more...]

Teleseminar – Insurance For Banking Cyber World

Insurance For Banking Cyber World Join us for a fast-paced, information-packed forty-five minutes of unbiased insight into bank insurance coverage issues. -Cyber Liability -Data Breach Mitigation -Cyber Fraud -Computer Equipment Coverage -Cyber Insurance Markets -Insurance Strategies No sales pitch here. Valuable information, … [Read more...]

Insurance vs Uninsurance

Here are some of the calls I have gotten over the past month... - A TX bank with the same insurance agent for fifteen years discovered that they had no lender liability insurance.  Potential loss: $300,000. - An MO bank found that the only coverage they have for a sex discrimination lawsuit is for defense costs.  If they lose the lawsuit there … [Read more...]

Fidelity Insurance vs Fiduciary Insurance

I was asked recently about fidelity insurance.  As I mentioned in a prior post, fidelity insurance is employee theft coverage; AKA employee dishonesty insurance. Fiduciary coverage is very different. Fiduciary coverage is liability protection against allegations that you have violated the federal law governing employee benefit plans - known … [Read more...]

Worker Fraud on the Uptick

The June issue of Best Review includes a brief piece on the observation by fraud examiners that worker fraud is increasing. The article admits that this may be a "chicken and egg thing" with the current economy - are people stealing because times are bad or are employers being more diligent in the bad economy looking for problems? In any … [Read more...]