According to the U.S. Department of Commerce, financial services companies were responsible for $1.24 trillion dollars (or 7.9 percent) of this country’s gross domestic product.
Indeed, financial experts in the United States offer some of the most comprehensive packages of financial instruments to consumers who wish to manage risk, increase wealth or simply meet their financial needs.
If you own a business that offers financial or insurance-related services, you will face some inherent risks. As a professional within the industry, you likely understand the importance of protecting your investment with a solid insurance policy.
By comparing policy offerings and quotes from a number of insurance companies, you can be certain that you are making a choice that is of the most financial benefit to your firm.
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What Types of Businesses Fall Under the NAICS’s Finance and Insurance Sector?
The National American Industry Classification System, or NAICS, categorizes businesses into a number of sectors and subsectors for the purpose of economic data collection, analysis and reporting.
There are currently 740,017 American businesses classified under the NAIC’s Finance and Insurance Sector. These include the following business types:
- Monetary Authorities-Central Bank
- Savings Institutions
- Credit Unions
- Commercial Banking Firms
- Security Brokerage Firms
- Financial Services Companies that provide the following services:
- Credit Card Issuing
- Sales Financing
- Consumer Lending
- Real Estate Credit and Mortgage & Nonmortgage Loan Brokers
- International Trade and Secondary Market Financing
- Financial Transactions Processing, Reserve and Clearinghouse
- Investment Banking and Securities Dealing
- Commodity Contracts Dealing and Brokering
- Portfolio Management
- Trust, Fiduciary and Custody Activities
- Investment Advice and Financial Planning
- Pension Funds Management
- Health and Welfare Funds Management
- Trusts, Estates and Agency Accounts Management
- Insurance Companies including:
- Insurance Agencies and Brokerages
- Direct Life Insurance Carriers
- Direct Health and Medical Insurance Carriers
- Direct Property and Casualty Insurance Carriers
- Direct Title Insurance Carriers
- Claims Adjusters
- Carriers of Other Financial Vehicles
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.
As with any type of insurance policy, it is a good idea to discuss your many options with an insurance professional before making a purchase.
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Let an Independent Agent Help You Find the Right Business Insurance Policy
Navigating through the many options offered by financial services insurance providers can be time consuming and complex. Independent insurance agents in our network are equipped to answer your insurance-related questions and help you find a policy that is well-suited to your financial services company.
Because these agents are independent, they can work with a number of different, highly-rated insurance companies to present you with a selection of policies from which to choose. Speak with an independent agent near you to learn more.