Internet Liability and Identity

Theft exposure is a rapidly expanding exposure for community banks. There are three major areas of risk:

Internet Crime: claims involve loss of property (usually money) by unauthorized access / hacking into the bank’s computer system. Additional exposures include e-threats, e-extortion, and e-vandalism. Coverage availability under the Standard Form 24 Financial Institution Bond is very limited. Some of our carriers are addressing this exposure and have excellent new products available.

Identity Theft: claims involve loss of personal property due to unauthorized use of one’s confidential information including credit card information, social security numbers, etc. Perpetrators will either steal one’s unused credit or apply for new credit using another person’s identity. Our agency can insure the bank’s customer base on a blanket basis to cover the cost of re-establishing one’s credit and identity. This policy is relatively inexpensive and is priced on a per-customer annual fee. Premium is paid by the bank and purchase of the policy shows that the bank is pro-active in protecting its customers against this growing risk. By enrolling in this program, the bank greatly mitigates its exposure to liability as a result of identity theft incidents.

Internet Liability: this is a severe and rapidly expanding exposure to the banking industry. Typical exposure includes: liability due to alleged negligent handling of confidential information; loss emanating from denial or interruption of internet banking services; etc, We have this coverage available as an addition to our Directors and Officers Insurance policies.