Finance is a growing small business category that independent insurance agents can quote with Coterie Insurance—in minutes. To aid your understanding about the insurance needs of small business owners in this category, below are seven risk exposures financial service providers face, from both a property and liability perspective.
Fire and Water
For financial fiduciaries, property exposures come from a variety of sources, including equipment failures, natural disasters, customers, employees, and other third parties. When discussing property exposures, fire damage is of particular concern: financial operations often have an elevated level of risk due to the extensive electrical needs for computers, printers, and other technology and equipment. What’s more, HVAC system failures and flooding can lead to major water damage, not only to the building, but to critical equipment and records as well.
Crime
Because money passes through a financial services business, managing crime exposures can be a challenge. While direct theft of money and securities through hold-up robberies can occur without warning, employee dishonesty can be just as concerning. The administrative burden of auditing books can leave business owners exposed to embezzlement and a variety of other crimes. In a matter of seconds, dishonest employees can steal cash directly or illegally wire it to themselves. More troubling still, employees may take advantage of their access to sensitive customer information, which could harm the business and its customers, and lead to expensive legal proceedings.
Personal injury
When individuals are entering and exiting the business, premises liability exposures are significant. When injuries occur, the business can be held responsible. Accidents related to slips, trips, falls, and unauthorized access are common and major sources of concern. Something as simple as a wet floor or an uneven surface can lead to costly insurance claims following an incident.
Directors and officers
Lawsuits involving directors and officers (D&O) can be financially devastating for both a small business and its leadership. D&0 liability can come from many sources, and claims can arise without warning. Financial businesses are especially at risk. Allegations of mismanaged advisory services, estate handling, employee pension funds, and other financial activities often lead to costly lawsuits.
Cybercrime
Financial organizations are one of the most common targets for cybercriminals, as these businesses often store sensitive customer data. In addition, employees who are improperly trained on computer and data security could leave a company exposed to ransomware, viruses, malware, and phishing scams. Just one attack can result in data breach notification costs, reputational harm, litigation, and potential compliance fines.
Business interruption
Continuity is critical in business. For small businesses, continuous revenue, and cash flow are particularly important. Common causes of interruptions for financial businesses include natural disasters, fires, leaks, grid failures, cybersecurity events, and vandalism. Left uninsured, a single interruption can be enough to close a small business, long term, if not permanently.
Inland marine
You may not realize it, but inland marine exposures for financial businesses are vast. In fact, any property that is unique or valuable, in transit, in your client’s temporary care, stored at fixed (but movable) locations, or used to transfer information represents an exposure. Following an incident that leads to property damage, potential business losses include accounts receivable, computer equipment, key business data, and records.
Opportunity is BOP(ing)
Most financial service professionals need a Business Owners Policy, which includes both property and general liability coverage. If there are D&O exposures, add a professional liability policy. This is business you can quote in minutes with Coterie—and we love to write financial!
Whether your prospects are established financial service providers or just breaking into the industry, this list will help you identify blind spots in their risk management and insurance programs, and position yourself solidly as their small business insurance expert.
