Financial services companies are something everyone deals with throughout their lives. From mortgage brokers and lenders to banks, wealth management, insurers, and payment processors, almost everyone interacts with financial services businesses regularly, and this is even more true if you’re a business owner.
But have you ever wondered what kind of special insurance needs these companies, including the ones who insure you, your home, and your own business, have?
Read on to find out!
Cyber Liability Insurance
All financial companies these days are heavily reliant on technology, and yet they are also (as you might expect) desirable targets for hackers. Insurance products aimed at financial institutions will generally put a big focus on helping the company recover in the event of any issues with cyber security, especially those that go on to affect their clients.
All businesses generally have some kind of liability insurance, which means they have coverage if anybody is hurt or negatively affected on their premises or by their activities, and this is true of insurance for financial services businesses too; however, due to the sensitive nature of the data they usually hold they also need insurance for financial services to cover liability if things go wrong with their technology.
Financial organizations are not the only types of business that need this kind of cover, but it is a fairly essential product for them.
Coverage against claims and losses from outside of the United States is also generally important to finance companies. Even companies who don’t directly operate overseas tend to opt for some form of multinational cover, due to the complexity of chains of financial transactions and the frequency with which they may be trading in foreign markets.
Once again, this is not a form of insurance needed exclusively by the finance sector, but it is one that many US-based businesses don’t need to worry about.
Management and Professional Liability
When something as serious as money and financial contracts is involved, financial businesses tend to want to insure themselves against things like mistakes that they could be held liable for. This can include what is known as errors and omissions insurance – also known as professional liability – which covers them against claims relating to mistakes having been made by the business. Some other businesses, even small businesses, also take out this type of liability insurance too, but the scope of it tends to be larger for financial businesses where errors can lead to very expensive claims.
Financial services companies also need all the same types of insurance other types of companies need too, such as insurance on their locations and assets, general liability insurance, and workers’ compensation insurance, but it is interesting to see some of the less common and more industry-specific things they need in their insurance packages. Each business is different, however, and each company will have its own tailored package to meet the demands of the work they do and their general scale.