Even with excellent controls, procedures and security in place, community banks can be surprisingly vulnerable to dishonest employees, fraud artists, computer hackers and violence-prone individuals. Many of these threats are not addressed by a standard financial institution bond, leaving you dangerously exposed to losses. Chubb’s ForeFront Security Bond is designed to help.
Although it’s important to have the right insurance protection, it is just as important to know that your insurance company has the expertise to respond to complex claims. If you have a loss, Chubb’s financial institution claim specialists are ready to respond to your needs with the expertise to manage any unforeseen issues that can arise on a claim. For instance, Chubb’s specially developed policy for community banks also includes a pre-determined securities settlement—a feature not usually offered by other insurance carriers—to help eliminate any claim payment issues in the event of a securities loss. You can also be assured of receiving Chubb’s hallmark claim services—prompt and fair claim handling.
A community bank suffered a significant loss in a check-kiting scheme involving at least two other banks. To compensate for the loss and anticipated legal expenses, the bank held a seven-figure reserve and restated its earnings. The adjustment significantly reduced the bank’s net income, with per-share earnings dropping by almost 50%.
A bank vice president was convicted and sentenced for accepting more than $200,000 in bribes in return for approving loans. The bank lost more than $4 million when the loans defaulted, and it failed soon thereafter.
The claim scenarios described here are hypothetical and are offered solely to illustrate the types of situations that may result in claims. These scenarios are not based on actual claims and should not be compared to an actual claim. The precise coverage afforded by any insurer is subject to the terms and conditions of the policies as issued. Whether or to what extent a particular loss is covered depends on the facts and circumstances of the loss, the terms and conditions of the policy as issued, and applicable law.