Commercial Property Insurance

Banks are a unique risk for commercial property insurance and your policy should be written on a “bank-specific” form. There are several components included in the bank specific policy that do not exist or are specifically excluded in the policies issued by insurance carriers that do not specialize in insuring banks.

One of the major hazards inherent in the banking industry is foreclosed property exposure - both from a collateral value and from a liability standpoint. Commercial property insurance policies written for the non-banking community generally include a specific exclusion for foreclosed property. It is also advisable to cover your General Liability risk through the same company that provides your bank’s Directors and Officers Liability policy - the liability agreements for these policies carry a degree of overlapping coverage.

In addition to foreclosed property risk, bank-specific policies generally include a “financial institution package” endorsement that responds to additional exposures such as valuable papers, automated teller machines, EDP property, etc. These are valuable enhancements to the policy and are generally offered at a minimal premium.

We always include bank-owned vehicles under the bank’s commercial property policy and never insure them under a separate policy. Insuring bank owned vehicles outside the bank’s policy generally results in inadequate liability limits and could remove the vehicles from the commercial catastrophe (Umbrella Liability) policy’s coverage.

As an additional provision of our services, we establish a relationship with your bank and a professional third-party insurance tracking firm. This company tracks the insurance on loan collateral on a line-charge basis and notifies the bank when coverage lapses or is cancelled so the bank can take appropriate action to reinstate coverage. This company’s contract includes an errors and omissions provision and meets regulatory requirements for your bank’s collateralized loan portfolio.

We contact our banks quarterly to assure policy changes (new bank locations, vehicle changes, foreclosed property, etc.) are reported to the insurance carrier on a timely basis. As with the other major policies, we review coverage annually and take the bank to market every three years to assure appropriate coverage and premium levels. We also include a synopsis of property coverage in our board reviews and executive summaries.