Common Exposures
As a financial institution, your visitors trust you with their money. And, whether you provide checking or savings accounts, loans, or cash and wire transfers, there are a number of risks associated with your operations that you might not have access to considered. The list below offers an overview of common financial intuition exposures, helping you identify potential blind spots in your risk management and insurance programs.
- For financial institutions, property exposures can come from a variety of sources, including complete breakdowns, disasters, customers, employees and other third parties. When discussing property exposures, fire damage is of particular concern, and financial institutions face an elevated degree of risk because of electrical wiring for computers, printers and other office equipment. In addition, HVAC system failures and flooding can lead to major water damage and mold, not just to the structure, but to critical equipment and records too.
- Because financial institutions are constantly handling money and frequently have high levels of cash on hand, managing crime exposures can be a challenge. What's more, the administrative burden of auditing your books can leave you subjected to embezzlement and a variety of other scams. While direct theft of cash and securities through hold-up robberies can occur without warning, employee dishonesty can be just as concerning. In a matter of seconds, dishonest employees can steal cash directly or illegally wire it privately. More troubling still, employees may take advantage of their use of sensitive customer information, which could harm your reputation and result in expensive legal proceedings.
- Because of the large number of people entering and exiting the company, premises liability exposures for financial institutions are significant. In addition, when injuries occur at your business, you may be held accountable. Accidents related to slips, trips, falls and unauthorized use of the structure are typical and major sources of concern. Simple things like a wet floor or an uneven surface can result in costly insurance claims following an incident. Additionally, because banking institutions handle high levels of money, the threat of armed robberies and workplace violence is ever present.
- Lawsuits involving directors and officers can be financially devastating for both a company and it is leadership. In addition, D&O liability may come from many sources, and claims can arise without warning. Financial institutions are specifically at risk, and senior leaders could be sued in case your organization mismanages advisory services, estate handling, employee pension funds or other financial activities.
- Financial institutions are one of the most common targets for cybercriminals, as these businesses often store sensitive customer data (e.g., names, addresses and charge card information). Additionally, employees who're improperly trained on computer and knowledge security could leave your organization exposed to ransomware, viruses, phishing scams and malware. Only one attack can make you subjected to reputational harm, litigation and data breach notification costs, and potential compliance fines.
- Continuity is crucial in business, and there are few things more essential than continuous revenue and cash flow, particularly for promising small to medium-sized organizations. Actually, just one brief business interruption could be incredibly costly for a corporation, often leading to serious reputational damages or long-term closures. Common interruptions for banking institutions can include natural disasters, fires, leaks, cybersecurity events and vandalism.
- You might not understand it, but inland marine exposures for banking institutions are vast. Actually, any property that's unique or valuable, on the road, in your temporary care, stored at fixed (but movable) locations or used to transfer information represent an exposure. Following an accidents that leads to property damage, potential losses for your business include a / r, computer equipment, and key business data and records.
For More Information
Proper risk management practices can reduce certain exposures, but no product is 100% effective in ensuring an incident-free workplace. As a result, it's all the more crucial to make use of a trusted insurance professional to assess your specific exposures. To learn more, contact INSURICA today.
(c) 2022 Zywave, Inc. All rights reserved.
