Banker's Blanket Bond

A banker’s blanket bond (BBB) is a fidelity bond purchased from an insurance broker that protects a bank against losses from various criminal acts carried out by employees. A banker’s blanket bond is also known as a blanket fidelity bond. Some states require blanket bond coverage as a condition of operating a bank


Banker’s blanket bond insurance is a type of insurance that covers the losses due to fraudulent act of employee. In banking services it is necessary because it gives protection against many damages.

The following are the insuring clauses available:

  1. Infidelity of Employees:

This clause provides coverage for any loss due to misappropriation or embezzlement by dishonesty of the insured’s own employee(s).

  1. On premises:

This clause provides coverage for loss &/or damage to insured’s property due to various perils including fire whilst in the premises where the insured carries on business and other specified places which should clearly be defined while opting for this clause. Some of other risks of this section are followed as under

  1. Cash in Safe and on counter
  2. Lockers
  3. In-transit:

This clause provides coverage for loss &/or damage to insured’s property whilst in-transit to and from premises along the defined geographical area.

  1. Forgery and Alteration:

     This clause provides coverage for loss caused due to forgery or alteration (forgery means the forging or fraudulent alteration of any document or the uttering of any forged or fraudulently altered document by the employee(s) whereby one obtains possession of monies or goods.) and Forged Cheques are also covered therein.

  1. Securities:

     This clause covers securities of the insured (Stock, Certificates, Bonds, and other Governmental guaranteed authority stocks etc) whilst in insured premises or others due to loss &/or damage resulting from named calamities.

  1. Counterfeit Currency:

     This clause provides coverage for loss resulting from the acceptance of counterfeit currency by the teller or other charged employee of the insured provided normal and standard procedures and precautions are fully exercised.

  1. Office and Contents:

     This clause provides coverage for loss &/or damage caused by fire and other perils to the office. The contents of the insured’s premises should specifically be named whilst opting for this coverage. Fixed assets and Computer Equipments are also part of this section.


Object of Insured : Financial Loss


Common exclusions of Bankers Blanket Bond insurance are:

  1. Indirect or consequential loss
  2. Loss by wear, tear, gradual deterioration
  3. War, civil commotion
  4. Specific exclusions are mentioned in your policy.

Sum Insured

This sum insured should represent the maximum amount of loss which could be suffered by the bank due to any single incident

Extended Coverage

The following additional perils can be covered on payment of an additional premium:


  1. Losses due to flood, inundation, hurricane, typhoon, storm, tempest, tornado and cyclone.
  2. Losses due to earthquake – Fire & Shock
  3. Additional sum insured can be opted for under Section A & B.

Minimum Data Requirement

  1. Details of insured
  2. Auditing and Compliance Practices
  3. Organisation Procedures
  4. Account Maintenance
  5. Physical Security
  6. Lending Procedures
  7. Funds Transfer
  8. Electronic and Computer Crime
  9. Discretionary Account Management
  10. Fund or Investment Management
  11. Insurance Experience

Claim Procedures

In case of discovery of any loss falling under the scope of the policy, the following steps should be taken:

  1. Inform insurance co. by phone and/or fax/letter.
  2. In case of burglary/robbery/theft/hold-up etc. inform police and get FIR registered.
  3. In case of dishonest act of employee, inform police and initiate departmental enquiry.
  4. Submit claim form and relevant documents to substantiate loss to the surveyor appointed by the insurance company.
  5. Take reasonable steps to prevent further loss due to the same reason.