Banks Found Buying More Web Insurance
NU Online News Service, March 4, 1:56 p.m. EST? Community banks are beefing up liability insurance for their Web sites, according to a survey released today.
"Web Census 2002," co-sponsored by the American Bankers Association Community Bankers Council, and the ABA Banking Journal, found that banks are increasing eight different forms of coverage.
According to the survey of 921 community banks, roughly 45 percent of them obtained extra liability insurance related to Web site risks.
Geographically, the survey found a split in the focus on Web site risk. The additional Web site insurance, it found, is most frequently bought by banks in the West (50 percent), and least frequently in the Central states (39.1 percent).
Fifty-nine percent said their increased coverage was on the financial institution's bond, 32.8 percent obtained more coverage through their general liability policy, 20.8 percent increased their electronic data processing and internal systems coverage, and 17.1 percent upped EDP coverage for external systems.
Also, 13.3 percent added to business disruption coverage, 7.8 percent added to business interruption coverage for the customer, 4.4 percent increased media liability, and 3.8 percent added to a "data ransom" policy.
Among the survey's other findings, one in five bankers expect the Internet to be their leading consumer-banking channel by 2005.
According to the survey, 49.2 of the respondents have unprofitable bank Web sites that are expected to remain unprofitable but crucial to customer service, while 29 percent expect their sites will soon be profitable, and 20 percent do not know.
The study is available at www.aba.com/aba/pdf_files/websurvey302_1.pdf .
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.