Finance and Insurance sector
The finance and insurance sector is part of the financial activities supersector.
The Finance and Insurance sector comprises establishments primarily engaged in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or in facilitating financial transactions. Three principal types of activities are identified:
1. Raising funds by taking deposits and/or issuing securities and, in the process, incurring liabilities. Establishments engaged in this activity use raised funds to acquire financial assets by making loans and/or purchasing securities. Putting themselves at risk, they channel funds from lenders to borrowers and transform or repackage the funds with respect to maturity, scale, and risk. This activity is known as financial intermediation.
2. Pooling of risk by underwriting insurance and annuities. Establishments engaged in this activity collect fees, insurance premiums, or annuity considerations; build up reserves; invest those reserves; and make contractual payments. Fees are based on the expected incidence of the insured risk and the expected return on investment.
3. Providing specialized services facilitating or supporting financial intermediation, insurance, and employee benefit programs.
In addition, monetary authorities charged with monetary control are included in this sector.
Insurance for the Financial Services Industry Is Necessary to Protect Investments
Whether you are running a small community bank, an investment advisory firm or any other business within the financial services and insurance sector, you will need to protect your business from a number of risks including theft and property loss or damage.
While all business plans will provide general liability and property damage coverage, plans for financial services companies will likely offer additional coverage options that are most suitable for companies dealing with large sums of money and providing professional financial assistance.
Some coverage types you may want to consider include
Professional Indemnity Insurance
Also known as errors and omissions (E&O) coverage, this is designed to protect companies and professionals who give advice or provide services should they need to defend themselves against negligence lawsuits. While this insurance will provide coverage for legal fees, it will not protect wrongdoers from criminal prosecution.
Fidelity and Crime Insurance
This coverage can protect your financial assets from loss of money, securities and inventory if the loss is the result of crime. This can include crimes such as embezzlement, forgery, cyber fraud, wire-transfer fraud, counterfeiting, robbery and even employee dishonesty. In firms where large sums of money are handled or managed, this type of coverage is particularly important.
Identity Theft Expense Reimbursement Coverage
This coverage is designed specifically for financial institutions. It enables financial services companies to reimburse their customers for losses brought on by identity theft.
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