Financial Institutions Insurance FAQ

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Get answers to small business insurance frequently questions including costs, coverages, minimum requirements, certificates & more.

Types Of Small Business Insurance

  • Includes medical payments, legal representation, and defense against libel and slander accusations.
  • Provides financial protection if an employee has a job-related accident or illness.
  • Bundles general liability insurance and commercial property into one affordable policy.
  • Pays to repair or replace your business property if it's stolen, damaged, or destroyed in a fire or natural disaster.
  • Covers mistakes or alleged mistakes on your part (errors) & failures or alleged failures to perform a service (omissions).
  • Is liability and physical damage protection for vehicles, such as cars, trucks and vans, that are used for business.
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Frequently Asked Questions About Small Business Insurance


What types of business insurance do I need?

Almost every business needs general liability and commercial property insurance at the very least. If you have any non-owner employees, you'll most likely need workers compensation insurance too as most state require it. Other types to consider are: commercial auto, professional liability, cyber liability, inland marine and others. It all depends on the risks your business faces. Read more...

How much does general liability insurance cost?

In 2019, commercial general liability costs can vary widely based on industry. Premiums are also determined by zip code and often payroll and/or gross sales. You can request a free quote to get an exact premium for your business. Read more...

How does general liability insurance work?

Having general liability is the basis of any business insurance program. If you can afford only one commercial insurance policy for your small business - then you should get a commercial general liability policy, because it offers protection against a wide range of unexpected risks, and will form the foundation of your business financial protection. Read more...

What is a Certificate of Insurance?

A Certificate of Insurance (COI) is proof of coverage. It verifies that you have insurance coverage for your small business, & contains information on types and limits of coverage, insurance company, policy number, named insured, and the effective date of the policy. Read more...
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Financial Institutions Insurance FAQ Information

Financial Institutions Insurance FAQ

Financial Institutions Insurance FAQ. Financial institutions handle, receive, disburse, and invest money of others. They are subject to regulations specific to their operation but they are also subject to legal and moral obligations for their customers. Customers entrust their funds to these institutions because of their confidence in the management's ability.

Insurance is a necessary means to protect the financial institutions and their customers against various types of losses. The financial services offered and the personal relationships created by the institution can only be protected through the use of a sound insurance program and appropriate bonding practices.

We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Financial Institutions Insurance FAQ.

Read the Financial Institutions Insurance FAQ to learn what type of commercial insurance coverages are right for your company - including liability, property, workers compensation and other specialty policies.

What Is A Service Business?

According to Investopedia, "A financial institution is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.."

Financial Institutions include - but are not limited to - the following types of businesses:

  • Banks
  • Building and Loan Associations
  • Check Cashing Services
  • Credit Unions
  • Finance Companies
  • Insurance Companies
  • Investment Companies
  • Loan Companies
  • Money Exchanges
  • Mortgage Companies
  • Real Estate Loans
  • Savings and Loans

You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.

Types Of Financial Institutions Insurance Policies

Following are some suggested commercial policies and coverages applicable for money related businesses:

PACKAGE POLICIES

Commercial package policies are the most convenient way to combine several coverages under one policy. Financial institutions are limited to only the commercial package policy (CPP). The crime coverages that can be packaged for other industries are not available for financial institutions.

Types Of Financial Institutions Package Policies:

  • Commercial Package Policy (CPP)
PROPERTY COVERAGES

The property exposures of most financial institutions are often limited to office-type exposures and substantial amounts of money and/or securities on the premises. Even though money and securities are excluded in most property coverage forms, the building and other personal property damaged because of an attempted theft or break-in are covered.

Financial institutions may also be responsible for arranging property insurance for trust accounts and on foreclosed properties. Most financial institutions do not sustain significant business income losses but may incur a substantial extra expense loss in order to meet the regulatory requirements of remaining open even after a property loss.

Types Of Property Coverages:

  • Building
  • Business Personal Property
  • Personal Property of Others
  • Improvements and Betterments
INLAND MARINE COVERAGES

Some financial institutions purchase mail coverage to protect valuable securities sent through the mail. Other coverages may be needed, depending on the type of financial institution and the manner in which it operates. A thorough property inventory can be used to determine the most appropriate property or inland marine coverage form to use for insurance protection for certain types of property.

Types Of Inland Marine Coverages:

  • Accounts Receivable Coverage
  • Commercial Articles Floaters
  • Difference in Conditions (DIC) Coverage
  • Electronic Data Processing Equipment Coverage
  • Fine Arts Coverage
  • Mail Coverage
  • Scheduled Property Coverage
  • Signs Coverage
  • Transportation Coverage
  • Valuable Papers and Records Coverage
CRIME COVERAGES

Financial institution bonds provide the appropriate crime coverages for financial institutions. Financial Institution Bond #24 is the most common form used by banks and savings and loan operations. Other bond forms are used with specific businesses or for special applications.

Types Of Crime Coverages:

  • Computer and Funds Transfer Fraud Coverage
  • Employee Theft Coverage
  • Forgery or Alteration Coverage
  • Inside The Premises-Theft of Money and Securities Coverage
  • Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
  • Money Orders and Counterfeit Money Coverage
  • Outside The Premises Coverage
SURETY COVERAGES

Financial institutions may be required to provide a number of different bonds because of their relationships with clients and regulatory agencies.

Types Of Surety Coverages:

  • Court Bonds
  • Fiduciary Bonds
  • Miscellaneous Surety Bonds
  • Notary Public Bonds
COMMERCIAL LIABILITY COVERAGES

The general liability exposures for financial institutions are similar to those of other office buildings, except for the added loss potential due to holdups because of the amount of money on the premises. Most of the unusual exposures to loss are covered by one of the professional liability coverages.

Types Of Liability Coverages:

  • Commercial General Liability (CGL) Coverage
  • Employee Benefits Liability Coverage
  • Employment-Related Practices Coverage
  • Special Events Liability Coverage
PROFESSIONAL LIABILITY COVERAGES

Most financial institutions employ a number of professionals performing a variety of tasks and professional services. The institution should prepare a list of all such operations to determine the appropriate insurance protection needed for the professional errors and omissions of these employees and their activities.

Types Of Errors And Omissions (E&O) Coverages:

  • Accountants Professional Liability Coverage
  • Errors and Omissions - Miscellaneous Coverage
  • Insurance Agents and Brokers Errors and Omissions Coverage
  • Law Enforcement Liability Coverage
  • Lawyers Professional Liability Coverage
  • Mortgage Bankers and Servicing Agents Errors and Omissions Coverage
  • Registered Representative Errors and Omissions Coverage
  • Title Abstractors Professional Liability or Errors and Omissions Coverage
  • Trust Department Errors and Omissions Coverage
COMMERCIAL AUTO COVERAGES

Private passenger automobile fleets, including hired and non-owned auto, are the major automobile exposures for most financial institutions. In addition, garagekeepers coverage may be needed where any valet parking operations are conducted. Single interest insurance coverage may be used by entities that provide financing for automobiles.

Types Of Business Auto Coverages:

  • Auto Medical Payments
  • Business Auto Coverage
  • Collision Coverage
  • Comprehensive Coverage
  • Garagekeepers Coverage
  • Hired & Non-owned Auto Coverage (HNOA)
  • Single Interest Insurance Coverage
  • Uninsured/Underinsured Motorists Coverage
WORKERS COMPENSATION COVERAGES

Most employers are required by state statute to provide coverage for on-the-job injuries sustained by their employees through a workers compensation policy or comparable self-insurance plan.

In monopolistic states where the only option is a state-issued workers compensation policy, a separate stop gap or employers liability policy is to fill a very important coverage gap.

Types Of Workers Comp Coverages:

  • Excess Workers Compensation Self-Insurance Bonds
  • Stop-Gap or Employers Liability Coverage
  • Workers Compensation and Employers Liability Coverage
EXCESS AND UMBRELLA COVERAGES

Although financial institutions have limited liability exposures, they are very high profile businesses in a community. As such, they need to carry higher limits of liability in case of a claim. These higher limits can be secured by purchasing umbrella or excess liability insurance. All liability policies, including professional, should be listed on the policy declarations.

Types Of Excess Liability Coverages:

  • Excess Liability Coverage
  • Umbrella Coverage
AVIATION COVERAGES

Larger financial institutions may own or lease aircraft in order for management to more easily visit and supervise operations located throughout a large geographic area. They should purchase the appropriate insurance coverage in those cases.

Types Of Aviation Coverages:

  • Aircraft Liability Coverage
  • Aircraft Passenger Liability Coverage
  • Aircraft Physical Damage (Hull) Coverage
SPECIALTY COVERAGES

Financial institutions may become involved with a variety of exposures because of their business relationships with their clients. The institution should prepare an inventory of these exposures and activities and develop a list of special coverages needed to provide the appropriate insurance protection.

Types Of Specialty Coverages:

  • American Expatriate Coverage
  • Business Legal Expense Coverage
  • Collateral Protection Coverage
  • Commercial Credit Coverage
  • Cyber Liability Coverage
  • Data Security Breach Coverage
  • Directors and Officers Liability Coverage
  • Export Credit Insurance Coverage
  • Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
  • Identity Theft Insurance Coverage
  • International Insurance Coverage
  • Tax Liability Coverage
  • Tender Offer Defense Expenses Coverage
  • Terrorism Insurance Coverage
  • Title Insurance Coverage

Financial Institutions Insurance FAQ - The Bottom Line

There are many commercial insurance policies available for Financial Institutions. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring financial businesses.

Frequently Asked Questions By Industry

Learn about the coverages available for specific industires with the Insurance FAQs below:

Financial Institutions Insurance FAQ
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