Examining Financial Institution Liability Risks
As reported recently by InsuranceJournal.com, financial institutions face a unique set of risks, given the specialized aspects of their operations. Given that they are increasingly being examined by both federal and state regulators, they must be extremely attentive to not only their Financial Institution Privacy and Network Security Risks, but also the everyday clerical duties performed by their staff.
There are a variety of errors that could occur in a bank’s clerical work; a miss-posting could result in a delay in customer service, an error could result in the bank receiving a sanction, and thus demoralizing employees. What’s more though, is that a clerical error in a bank could cause a banking customer to lose a significant amount of money, and pursue costly litigation to recover their losses.
While Financial Institution Errors and Omissions Insurance will financially protect your clients from these types of claims, it’s important that they do everything in their power to potentially reduce their own risks. So what are the most common causes of clerical errors in financial institutions?
Even the most meticulous employee could be overwhelmed if the amount of work they face is more than they can handle. The majority of the time, they could feel they’re doing everything right and still make an error if overworked.
Are your clients’ workers appropriately trained for the job duties they are performing? If a task or procedure is too complicated, unsystematic, unorganized, or a staff member simply has not been taught how to properly perform the task, chances are mistakes will be made.
Poor Working Conditions
Employers may be surprised by just how distracting noisy environments, or hot, cramped or poorly illuminated work areas can be. Directors and officers should do everything in their power to ensure that their work environment is ergonomically sound, comfortable, and conducive to efficiency.
The above mentioned factors are just a few potential causes of clerical errors in financial institutions. Lack of standards, unclear instructions, and lack of training, as well as low incentives, could also increase your clients’ risks of facing clerical errors.
PLRisk Advisors is a leading wholesale insurance brokerage covering the professional liability market. Our team of seasoned professionals has the depth and breadth of knowledge to help our agency partners secure the best quality coverage for their clients. For more information about our products and services, please contact us today at (855) 403-5982.
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