You're Not Covered
Aug 02, 2023
The bank had never conducted regular night inspections that were documented. Last week two staff members from the fast food location next door made the evening deposit to the night depository at 2 AM.- only this time they were robbed by at least two men. They contacted the local police department who took reports, and searched the local area with no results. The next morning bank staff arrived at the branch and began performing the normal opening procedures. When they conducted the morning inspection of the ATM they noticed someone had placed tape over the ATM camera. Imagine their surprise when they called the police department to inform them that someone had been tampering with the ATM camera and found that two people were mugged at that location last night.
It is not unusual for local law enforcement to sometimes neglect to inform a financial institution of an incident. This can happen for several reasons. They may have conducted the entire investigation the night of the incident or something else happens first thing in the morning so their resources are tied up at another location. The bank may not have provided them with an emergency contact number or for some reason the police didn’t use it.
If the people who were robbed contacted an attorney, the first time you hear about it may be when a freshly pressed lawsuit is served upon your financial institution. When the attorney is contacted, they retain an expert witness who will immediately do a night inspection of this location before the lawsuit is prepared. At this point, no matter what you change or adjust, the lawyer has the information on what this area looked like the night of the robbery.
The cost of this incident starts growing, with perhaps little to no insurance coverage for the costs you will now start incurring. All of the time that your staff will spend now reviewing the area, making changes by adding lights, cameras or reducing landscaping, will not be covered by insurance. During the discovery phase of this incident the opposing attorney will have all personnel involved at this branch in for interviews, along with your attorney or the insurance company present. You will be paying your staff who are out of office plus the replacements you make for them while they are gone. As your policy likely states, you agreed to help the insurance company with the time away for these people at your expense. Eventually you may end up in a courtroom where your polices and procedures will be exposed to everyone. The headlines will point out what went wrong at your banking premises. We have seen cases like these for ATM robbery, night depository robberies, or incidents on your parking lot or premises that follow the same pattern. Losses for the individual financial institution can range from $100,000 to $1,000.000 that is not covered by insurance.
Does your institution have a documented night inspection program? If it isn’t documented, the answer is no. Have you had a meeting with your local police agencies and provided them with emergency telephone numbers to call at night? Do your local police agencies know you want any problems around your premises reported to you? Don’t put yourself in a position to find out about an incident after it happens when your receive notice of a lawsuit. The incident above did happen last week and we are waiting to find out if an attorney was contacted by the two people robbed at the night drop.
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