Premiums That Are Too Good To Be True! The attached article from August 2009 Independent Agent Magazine may be of interest to those bankers who are “cost conscious” when it comes to implementing insurance their financial institution. While the examples provided lend themselves to the personal lines side of the industry, the parallel exists for your bank program, too. In our industry, there is one carrier that is always lower in premium. As a matter of fact, I just visited with a shareholder bank who told me that they received a proposal that was, in their words, “jaw dropping”. In fact, it made the “15% or less” tag line seem downright cheap by comparison! Premium is always a factor when structuring your insurance program. It always has been and always will be. And with the obstacles currently facing community bankers, that’s probably more true today than in years past. But we can all agree that if it looks to good to be true, then it probably is. Let’s work together to review the actual coverage of your program. Let’s create an insurance program that is specifically tailored to your bank and, in the process, do away with the comparison of apples and rotten oranges! Comparing Apples and Rotten Oranges Director's To-Do List I found the attached article from August 2009 edition of Community Banker to be interesting. While "short and to the point”, it does remind us of key duties for directors of community banks. Take a look at numbers 3 and 5. The first thing that occurred to me is that they go “hand in hand” when it comes to the insurance program for the bank they serve. In fact, a director cannot actually set the risk tolerance of a bank (relative to insurance structure) unless they are educated! As an example, let’s try this following procedure as it pertains to the bank’s own D&O policy: the very policy that protects the people making the decisions. If a community bank leader wants to really get an idea of the comfort level of the bank, I challenge them to ask the following questions of their board: How much D&O insurance do we have? How much Financial Institution Bond insurance? Does the policies share limits, or do our exposures sit independently of one-another? Are there "aggregates" on what we have and, if so, what are they? Are we covered for Lending suits? Employment Practices suits? Civil Money Penalties? How are we protected for privacy OUTSIDE of our internet liability policy? It’s a fundamental fact that delegation is an important part of any leadership chain. And, in many instances, the insurance portion may be delegated to another trusted board member for handling. But if the answers aren’t forthcoming and easily communicated, then perhaps the steps need to be revisited! With FNBB Insurance Agency, we act not only as a valued partner and resource, but also as a “teacher”. I think you’ll find that our services really fill a need! In Training - Educating your Board of Directors Make Sure You're Covered This Community Banker article from August 2009 is one that should be required reading of all insurance-buyers for banks across America. Sort of like “To Kill A Mockingbird” was to fourth-graders! There are many things that are worth noting, but I found the following to be one of the best: “While the discussion of limit adequacy should no be discounted entirely, limits are only part of the equation because claims against community banks rarely exhaust limits of liability. Rather than focusing solely on limits, management should pay particular attention to policy structure….” The key focus of our work at FNBB Insurance Agency has NOT been to save the bank as much premium as humanly possible! Rather, it has been to evaluate the STRUCTURE of the entire program, find areas that are missing/over-insured/under-insured/etc., and structure a program that protects the bank. That being said, we do know that premium is very important and one of the many reasons why we do an “apples-to-apples” comparison. In hindsight, I guess I should have said that I liked the following section: “Work with a knowledgeable insurance professional who understands the financial institution marketplace and can thoroughly evaluate and explain a quotation.” Trust us to be your partner when it comes to your insurance program. You will like what you see! Make Sure You're Covered