However, financial institutions should rebut this argument by stating that their primary business is banking, not advertising, and therefore coverage should not be denied. As set forth above, an insurance company may argue that the coverage territory is limited to the United States, and therefore any claims relating to internet injuries outside the United States would not be covered. There are numerous articles every day about potential and actual fraud on the internet. Despite the efforts to keep personal information confidential through encryption, hackers can obtain access to valuable information on the net. In light of the ability of sophisticated hackers to tamper with sensitive computer information, financial institutions may find themselves subjects of fraudulent entries or changes of electronic data.
Banks can also suffer losses as a result of the acts of dishonest employees.
A financial institution bond should provide coverage for a bank s loss as a result of a dishonest employee. The employee must have the manifest intent to cause the financial institution harm. There is nothing in the financial institution bond that excludes coverage for losses resulting by computer. Therefore, to the extent that a dishonest employee is responsible for a financial institution s loss, the financial institution should be able to recover under the bond. The act must have been carried out by a third party.