Why financial and insurance companies need insurance
All financial and insurance companies should carry several forms of insurance. Insurance companies may need to cover a wide range of areas, including company vehicles and computers, as well as protections against claims of fraud or improper handling of insurance claims.
Financial companies should be aware of the laws governing the industry. Any business handling money and personal information should be particularly concerned with their responsibilities as a trustee, and should ensure that they maintain policies that insure against claims related to legal or contractual obligations.
What Insurance Do Finance & Insurance Companies Need?
Professional Liability covers claims made against your company by a client related to financial loss or negligence on the part of your company.
Example... Your insurance company miscalculates the amount of money a client should have received from a claim and sues you their financial loss. Professional Liability covers you for this.
A Fiduciary Bond covers claims that the legal fiduciary agreement has not been met. A Surety Bond provides the client compensation if your business fails to meet its obligations.
Example... If you are legally considered a “fiduciary” under ERISA, you need to obtain this insurance policy. Anyone who handles pensions, 401(k) plans, 403(b) plans, savings plans or any type of retirement account will be considered a fiduciary.
Directors and Officers Insurance covers claims of mismanagement by the directors or officers of you company.
Example... The board of directors of your company makes an unpopular decision on how to handle declining stock values, and each director is sued by your shareholders. A Directors and Officers Insurance policy may cover the legal defense costs of this claim.
Commercial Property Insurance covers the unexpected damage or loss of buildings where your business operates, and equipment such as computers.
Example... A fire breaks out in your office, damaging the building and all your equipment inside. Commercial Property Insurance covers the costs for relocating to another office and the repair and replacement costs of lost or damaged equipment.
General Liability Insurance covers your liability related to accidental damage of a client’s property, as well as bodily injury to clients on your property.
Example... A customer trips and falls on your commercial property, sustaining injury. General Liability covers their medical bills and your legal defence costs if they sue you.
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FAQs: Insurance for Finance and Insurance Companies
What business fall under the industry of "finance and insurance"?
This industry refers to businesses such as:
- Accounting Firms
- Insurance Companies
- Mortgage Lenders
- Asset Management Companies
- Commercial Banks
How much does it cost to insure a finance or insurance company?
The total cost of any insurance policy you purchase will vary depending on the size and location of your company. In some cases, the number of assets that your company manages will have a direct impact on the cost of certain insurance policies.
The best way to determine the cost of your insurance policy is to obtain a quote.