Financial Institution Insurance

Types of insurance cover your financial institution business may require

Insurance programmes for financial institutions would typically include a combination of the following cover:

• Crime: Your company will be insured against any employee infidelity, physical loss or theft of valuable property from the business premises or whilst in transit and the theft of funds via either forgery or falsification of documentation. This can also be extended to include extortion, kidnap and ransom for high profile institutions.
• Directors and officers liability: This will protect against any claims made against directors, officers and senior employees for actual or alleged breach of duty, neglect, misstatements, errors or omissions. 
• Employers’ liability insurance: This is a compulsory type of insurance for employers, regardless of whether the member of staff is permanent, temporary, volunteer, contractor or freelancer. The minimum level of protection is £5m, which will cover the cost of compensation claims if staff get injured or fall ill as a result of carrying out their required duties.
• Professional indemnity: Professional indemnity cover will include any claims made against the institution for negligent handling of a client’s business.
• Pension trustee liability: This will protect the liability of the trustee of a pension plan. The policy will pay any damages, awards, settlements, defence costs or official investigation costs.
• Employment practice liability: Financial institutions are becoming more exposed to employment related claims due to the development of employment law. The policy will provide protection for all employment practice violations.
• Cyber insurance: To provide cover against any possible data breaches or cyber hacks, which could potentially affect your computer systems and networks.

• Data breach insurance: Monetary coverage which will protect financial interests in the event of any data loss from IT systems and networks.

• Business interruption insurance: Providers cover for financial losses if your business can’t operate from its premises as normal as a result of a fire, major theft or a flood.

• Commercial buildings and contents insurance: Provides cover for your business premises in the event of flooding, a fire or theft.

• Business assets and equipment insurance: Provides cover for the assets that your business needs to operate, including furniture and computers.

• Credit risk insurance: Provides cover in the event that your clients don’t pay their invoices.

These are just examples of some of the types of financial institutions insurance policies that we look after at Black Lion Broking Services Ltd. 

What insurance do I need for my financial institution business?

If you are responsible for the running of a financial institution business of any kind you should consider taking out a tailored insurance programme. The wide variety of risks to both the staff and customers create the need for an insurance solution that provides comprehensive protection.

We know that no two financial institution businesses are the same, so speak to us today to find out which policies will best meet your needs.

What else do I need to know about insuring my financial institution?

As a financial institution, you will face a range of risks that you need to be insured against. 

These include:

• Systematic risk: This is caused by changes associated with systematic risks, such as changes in interest rates and government policies.

• Credit risk: This risk will arise due to your debtor’s non-performance. This could happen due to your debtor not performing as described in a pre-committed contract. Many people will be affected in this situation.

• Counterparty risk: This risk comes from the non-performance of a trading partner.

• Operational risk: Associated with processing, settling, taking and making delivery in exchange for money. A range of issues could occur due to record keeping, computing correct payments, processing system failures and complying with various regulations. These issues could easily expose your financial institution to a range of costly issues.
• Legal risks: One of the most common in financial institutions.