Crime Coverage for Banks and Savings and Loans
Summary: The most widely written financial institution bond is the financial institution bond, standard form no. 24. This is the standard package of coverages necessary to cover the crime exposures of commercial banks. While a separate form (no. 22) was previously used to provide coverage for savings and loan institutions, the present version of form 24 is applicable to both types of financial institutions. The bond (policy) is used to provide fidelity, on premises, in transit, forgery or alteration, securities, and counterfeit currency coverages for financial institutions. This discussion reviews these coverages.
Topics covered:
Insuring Agreement B—On Premises
Insuring Agreement C—In Transit
Insuring Agreement D—Forgery or Alteration
Insuring Agreement E—Securities
Insuring Agreement F—Counterfeit Currency
Nominees, Additional Offices, Change of Control
Representation of Insured, Joint Insured
Notice of Legal Proceedings Against Insured—Election to Defend
Forgery, Civil Commotion, Nuclear
Acts of Directors, Loan Activity, Safe Deposit Boxes
Travelers Checks, Loss by Employee, Trading Activity
Tellers’ Shortages, Credit and Debit Cards, ATMs
Threat, Erroneous Credit, Items of Deposit
Counterfeiting, Personal Property, Mail or Transportation Company
Notice/Proof—Legal Proceedings Against Underwriter
Assignment—Subrogation—Recovery—Cooperation
Limit of Liability under this Bond and Prior Insurance
General Description
The financial institution bond provides the broadest coverage available to commercial banks, trust companies, and savings and loan institutions. Four classes of insureds are eligible for the use of form 24: (a) national banks, state banks, and trust companies; (b) American agencies of foreign banks, cooperative credit associations of Nebraska, industrial banks, and Morris plan banks; (c) title insurance companies that act as trust companies or that accept deposits for savings or checking accounts; (d) federal institutions, such as the Federal Reserve Banks, Federal Deposit Insurance Corporation, Joint Stock Land Banks, Federal Home Loan Banks, and Federal Land Banks; (e) savings banks, by rider; and (f) by rider, savings and loan associations, cooperative banks in Massachusetts, and homestead associations in Louisiana.
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