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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.
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In order
to address the needs of community banks, the
ABA-sponsored and GBA-endorsed insurance program, underwritten by
Progressive, 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
coverages 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:
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Hackers, Crackers and Viruses
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Employee Sabotage
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Fraudulent Funds Transfers initiated by voice, fax, email or
Internet access
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Damage/destruction of data or computer programs
B. Internet Banking Liability Policy
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Affirmative, broad-form coverage for suits against the Financial
Institution and its directors, officers and employees
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Coverage for suits alleging invasion of privacy
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Coverage for advertising injury, such as libel, slander and
defamation
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Coverage for intellectual property claims, including copyright and
trademark infringement
Optional Endorsements:
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Business Interruption
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Cyber/Network Extortion
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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
call GBA’s
Chad Wilson at (404) 420-2031.
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