14 insurance small things you should sweat
Covering “small” items may save your bank from bigger problems later
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- Written by Scott Simmonds
Often banks focus on the “big things” when reviewing their insurance coverage. But when banks call me to review their coverage, I offer two choices.
Option one is to review their bank specialty insurance policies--the bond, the executive risk (also known as D&O), and cyber coverage. That’s what most bankers are interested in--the big, complicated, and expensive insurance policies they buy.
These policies may be the policies that their local insurance agent is less comfortable with. It is the insurance your board of directors is concerned about.
However, I also offer clients a second option: a review of all a bank’s insurance--bond, D&O, cyber, property, liability, auto, mortgage impairment, workers’ compensation, and umbrella liability.
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Every bank that has me review their “other policies” is surprised at the issues discovered. But it’s good to find them before you have a loss.
After a loss, the small stuff becomes big stuff.
Here are some coverages and coverage designs to consider in your bank’s property insurance.
1. Blanket coverage—Insure all your property in one amount of insurance instead of specific coverage on each building and the contents of each building. Having $5,000,000 of insurance on five buildings is more flexible than five buildings, each insured at $1,000,000.
Point 8: Many banks would insure this sign, but fail to cover the costly one out by the road, where it could be hit by truck. |
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9. Loss of rents—Are you renting out a building or part of a building? Loss-of-rents insurance covers that income should you have a fire and the tenant has to move away for a while. Buy 100% of your annual rental income for each location.
Point 14: Your building may have been grandfathered, but after a disaster reconstruction may trigger code upgrade requirements.
14. Ordinance or law—Your local or state laws may impose additional costs on you after a disaster. You may have been “grand- fathered” previously for the new sprinkler codes, or for other ordinances. This coverage section pays to get you up to code. It can also pay for the demolition of an undamaged portion of your building when such is mandated by your local fire department.
These are just some of the issues I see in my review of bank insurance policies and in the policy that most agents call the “easy” stuff. Can you imagine what tiger-traps exist in the more complicated policies?
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Tagged under Compliance, Risk Management,
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