What is a financial institution's bond?
A financial institution bond protects the financial institutions from risks that may occur as a result of their business. It works on the protection of the Bank's asset and its investment creates different types of losses that can be the result of employees or other external and internal action. The bond is a form of insurance for financial institutions and provides some basic coverage that all banks are obliged to bear. It also provides some optional coverage for additional costs that banks may or may not choose to purchase.
One of the basic coverage provided by a financial institution's bond is the protection of the assets of the financial institution. This includes incidents involving assets belonging to a financial institution, as well as any assets belonging to employees and customers in the bank. For example, if the armed robbery comes to the bank's premises to steal some money and then escape the customer vehicle, the customer's vehicle would be covered by a financial institution's bond. This is except for coveragelosses resulting from the stolen money of the bank.
Another basic coverage is for any item that is lost at the transition, either when switching to a bank or from a bank. These items include money, jewelry and other valuables. The only condition for ensuring the cover of these items in transit is that banks must involve the services of an armored vehicle, which is accompanied by an accompaniment that can either be a representative of the bank or the company of armored vehicles. Basic coverage also includes any type of loss caused by the bank through the wrong acceptance of counterfeit money by the depositor. Coverage also includes the actions of internal sabotage resulting from fraudulent activities involving employees of the financial institution.
Optional coverage of provided through a financial institution bond includes protection for any unauthorized use of credit and debit cards belonging to the bank customers. Between the nextTypes of optional coverage include protection of any loss caused by financial institutions due to data loss, either through a virus, computer hacker or equipment failures. The financial institution bond also provides the protection of any loss incurred by the bank due to the destruction or loss of the item that was placed in a safe depository. For example, if a customer puts some valuable precious stones into a safe depository and theft of stones, a financial institutional bond will cover the cost of stolen gems - if this option is included in the cover.