Internet Banking Insurance

Internet Banking Liability Insurance

As a result of the potential gaps in traditional insurance policies, many insurance companies are introducing “E-insurance” policies. Most, however, are designed for e-commerce businesses, not for financial institutions engaged in Internet banking.

As you evaluate these new products, you will find that coverage is expensive, mirrors the basic coverages that financial institutions already have under their Bond, and may not address the real gaps in coverage or risks relevant to financial institutions.

In order to address the needs of community banks, the ABA-sponsored and GBA-endorsed insurance program has developed an Internet banking insurance program separately for financial institutions engaged in Internet banking. The Internet Banking Protection Package, recently approved in the state of Georgia, is a unique insurance solution for community banks. Two interconnected policies provide first-party and third-party coverage to fill the gaps where traditional insurance policies do not extend to Internet risks. First-party protection is provided through the Enhanced Financial Institution Bond and third-party protection via a separate and distinct policy - the Internet Banking Liability Policy.

The Internet Banking Protection Package is designed to cover Internet banking, PC/home banking, and other electronic banking activities through the following interconnected policies:

A. Enhanced Financial Institution Bond- Fills the gaps in the standard Bond by providing coverage for loss due to:

Hackers, Crackers and Viruses
Employee Sabotage
Fraudulent Funds Transfers initiated by voice, fax, email or Internet access
Damage/destruction of data or computer programs

B. Internet Banking Liability Policy

Affirmative, broad-form coverage for suits against the Financial Institution and its directors, officers and employees
Coverage for suits alleging invasion of privacy
Coverage for advertising injury, such as libel, slander and defamation
Coverage for intellectual property claims, including copyright and trademark infringement

Optional Endorsements:

Business Interruption
Cyber/Network Extortion
Public Relations Expense

The Georgia Bankers Association worked closely with the ABA to institute this program at a time when most insurance carriers were either exiting the market or quoting extraordinarily high rates. To find out more about this program or to provide your bank with a competitive proposal please contact:

Patricia P. Williams, CPCU

Senior Account Executive

ABA Insurance Services Inc.

5910 Landerbrook Drive, Suite 100

Mayfield Heights, OH 44124

Mobile: 410.960.6878

Direct: 216.220.1280

Fax: 800.456.6590
www.abais.com

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