What is Bankers Blanket Bond–High Limits?
The Excess Bank Employee Dishonesty Bond, also known as the High Limits Bankers Blanket Bond, provides supplemental coverage beyond the limits of a standard Financial Institution Bond—Standard Form No. 24. This excess bond is issued using Standard Form No. 28 and is designed to protect banks and financial institutions from significant losses due to employee dishonesty, such as theft or fraud.
Who Needs It
This coverage is typically recommended for banks and other financial institutions that require higher protection limits than those offered under their primary bond. Institutions with large asset holdings, multiple branches, or a high volume of transactions may benefit from this additional layer of security. Regulatory bodies or internal risk policies may also drive the need for higher coverage limits.
What It Typically Covers
The Excess Bank Employee Dishonesty Bond provides protection against major losses caused by dishonest acts committed by employees. Covered acts may include:
- Theft of funds or securities
- Forgery or alteration of documents
- Fraudulent financial transactions
This bond functions as a backup to the coverage provided under the primary Financial Institution Bond, activating when losses exceed the underlying bond’s limits.
Common Exclusions and Limitations
Like most insurance policies, the excess bond has exclusions. Common exclusions may include:
- Losses not caused by employee dishonesty
- Acts committed by owners or partners
- Losses already covered under other policies
It’s important to review the bond’s specific terms, as coverage limitations may vary by provider and jurisdiction.
Factors That Influence Cost
Several factors can affect the cost of an Excess Bank Employee Dishonesty Bond:
- Total employee count and job functions
- Value of average deposits and total assets
- Existing internal controls and risk management practices
- Claims history or previous dishonesty incidents
There is no universal formula to determine adequate limits, but financial institutions often use average deposit size as a guideline when evaluating their needs.
Proof of Insurance and Compliance
Having this bond in place may help financial institutions meet internal auditing standards or regulatory expectations. While specific compliance requirements vary by state and institution type, maintaining adequate fidelity coverage is often considered a best practice in the banking industry.
How to Get a Quote
To explore your options and determine the right coverage limits for your institution, start by requesting a customized quote. Get a quote now.
Frequently Asked Questions
What is the difference between a standard and excess bankers blanket bond?
The standard bond provides baseline coverage for employee dishonesty, while the excess bond offers additional protection above the primary bond’s limits.
Is this bond required by law?
Requirements vary by state and financial institution type. While not always legally required, higher coverage is often recommended or mandated by regulators or internal policies.
Can this bond be tailored to my institution’s size?
Yes, limits and terms can often be customized based on your institution’s assets, employee count, and risk profile.
Does the excess bond cover cyber fraud?
Coverage for cyber fraud may be limited or excluded. Review your policy or consider a separate cyber liability policy for digital risks.
How do I determine how much coverage I need?
There is no fixed formula, but many institutions use average deposit values and internal risk assessments to guide their decision.
Still have questions? Talk to a local insurance expert.