Protect your financial institution with a Banker’s Indemnity Insurance policy. Cover risks such as fraud, employee dishonesty, and theft.

In recent times, the Indian financial arena, especially the banking sector, witnessed several violent, fraudulent incidents. In many cases, the consequential loss is so significant that it leaves a big hole in the balance sheet of the financial behemoths. According to reports from various banks, there were about 23,000 fraudulent cases between April 2013 and March 2018. In most cases, the banks’ employees were culprits. According to research, fraud accounts for nearly 90% of the substantial losses in the operational risks for the banks in India. The losses because of fraud or crime in banks are significant not only in India but also across the world.

The incidents of fraud have stimulated not only the need to reconsider the insurance limits bought but also deductibles/ self-insured retention levels. Taking a higher deductible signifies a bank’s confidence in its controls and risk appetite against its balance sheet. It allows it to garner higher limits from insurance markets, making the risk transfer through insurance more efficient. Bankers Indemnity Policy is there to protect bankers against these losses.

Every bank in India buys a Bankers Indemnity Insurance policy from locally licensed general insurance organizations. The policy covers losses incurred for theft happening at the insured’s premises resulting from wrongful acts such as forgery, criminal dishonesty, hypothecated goods, infidelity, and criminal acts by appraisers.

Most insurers provide insurance on all of these basic factors, with each offering different incentives or additional cover. For example, one general insurer allows banks to cover losses relating to automated teller machines, expenses for loss minimization, earthquake, fire or terrorism, as additions to the policy cover.

 An Example

One general insurance company permits banks to cover losses associated with automated teller machines, expenditure for minimizing losses, earthquake, fire, and terrorism. This policy covers losses incurred because of theft occurring inside the insured’s premises. Bankers Indemnity Insurance Policy covers losses incurred as a result of:

1.  Theft occurring within the insured’s premises

2.  Theft occurring in transit

3.  Forgery

4.  Criminal dishonesty

5.  Hypothecated goods

6.  Infidelity acts by appraisers and others

7.  Criminal acts by appraisers and others

8.  Certain covers permit banks and other financial entities to represent themselves through a legal defense team if a need arises. In some cases, the insurer offers a legal defense.