The financial world is one that is always in flux. Practically every day as of late there is something to keep an eye on as everything from Fed rate hikes to the housing market can affect how investors go about their stocks and bonds. And with this uncertainty baked in, there are bad actors who try to take advantage of peoples’ financial health, such as stockbrokers who commit outright fraud.
Stockbroker fraud is still relevant in today’s fluctuating financial market as everyone from seasoned investors to new traders still look to experts to deal with the finances. With this in mind, it’s important for other stockbrokers, investment bankers, stock exchanges, securities firms and commodity brokers to safeguard their assets and businesses from losses involving a great number of criminal activities with bank crime insurance. One option in bank crime insurance is blanket bonds for stockbrokers.
What’s Covered in Blanket Bond Insurance
Stockbrokers can use blanket bond insurance for a number of coverages including:
- Covering losses resulting directly from dishonest or fraudulent acts at the hands of an employee acting by themselves or with others. For example, if a stockbroker uses investor money to invest on their own, or basically steals the money and doesn’t in fact invest it, this can be counted as fidelity fraud.
- Blanket bond insurance also protects against something called “on premises.” This is a loss of property from a physical threat such as robbery, burglary, or damage. This also covers theft, false pretenses or statutory larceny committed by someone present in an office. Stockbrokers have, in the past, tried to steal documents and information via computers through flash drives, which can be considered on premises theft.
- In transit is another piece of protection blanket bond insurance covers. Companies can be safeguarded against this kind of loss that relates to robbery, common-law or statutory larceny or theft while property is in transit.
- And counterfeit currency is one that speaks for itself. Counterfeit currency covers loss resulting from the receipt of counterfeit money of the United States, Canada or any other country in which the insured has a branch office. This has mostly been relevant in cases where stockbrokers are trying to duplicate bills to spend with.
Stockbrokers can also use this kind of insurance when it comes to forgery or alteration of money or stocks. Also, this kind of insurance protects companies against larger fraudulent acts by executives who try to take advantage of the company itself, not just its investors. In-house fraud is a major crime that can bring multiple years in prison and potentially bankrupt a company.
The financial world is one that is delicate and can present many opportunities to act unjustly, given the nature of what it deals with: money. That’s why it’s even more important to not only practice honesty and integrity, but to have the right coverage to protect against those who try to take advantage of other people’s trust and money.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (877) 485-4413 to speak with one of our professionals.