For more on this part of the insurance industry:
This insurance is a type of cover that protects commercial financial institutions like banks and member-owned financial co-operatives like credit unions.
Banks and credit unions insurance helps secure against events such as:
Over 96% of adults in the UK have a bank account, and more than 1.4 million people are members of credit unions. This economic safety net supports a major part of the UK economy.
If a credit union were hit by ransomware, systems could lock and member data might be exposed. With cyber cover in place, they could fund IT recovery, notify members, and avoid fiscal collapse.
This shows how credit unions insurance in the UK can help institutions survive fraud, system failure, or legal claims.
More banks are adding insurance to mobile apps and are offering cover for travel, home, or devices. They are also working with insurtechs to sell policies online using open banking and smart data tools.
Credit unions now include life or funeral plans in accounts. This creates space for regulatory liability insurance in the UK.
Financial firms insurance brokers must check out these rising hazards in the industry:
cyber threats rising: phishing and ransomware attacks increase costs in banks and credit unions insurance
regulatory pressure growing: new rules make selling bundled or app-based cover riskier for brokers
tech dependency risk: small banks rely on fintechs which raises chances of professional indemnity insurance for banks
Brokers should also watch for the rise in authorised push payment (APP) fraud and mis-sold digital insurance products. These issues can damage client trust and lead to legal claims.
It’s smart to review cover terms and help clients understand them clearly. Doing so supports trust and strengthens advice around banks insurance in the UK.
Stakeholders who may require this insurance include:
This type of cover is useful for firms that handle money, give financial advice, or manage assets.
Common types of cover include:
Picking the right mix of cover helps shield operations, staff, and customer trust under banks and credit unions insurance.
Yes, banks in the UK are covered by the Financial Services Compensation Scheme (FSCS). This protects customers’ money if a bank, building society, or credit union goes out of business.
They can also buy extra insurance from private providers to cover business risks.
The FSCS will repay up to £85,000 per person, per bank. For joint accounts, that rises to £170,000. This applies to all UK-authorised banks and credit unions.
Yes, the FSCS safeguards savings in credit unions that are authorised by UK regulators. If a credit union fails, members can claim compensation through the FSCS.
This makes banks and credit unions insurance from private providers important for risks the FSCS does not cover.
Yes, but it depends on where the money is kept. The FSCS only protects up to £85,000 per person, per bank.
To stay secured, it’s best to spread large balances across separate UK-authorised banks. Each must have its own banking licence for full FSCS cover to apply.
To reduce risk, consider these steps:
use multiple banks: spread money across banks with separate licences for full FSCS protection
check licence details: some banks are linked under one licence, which affects cover
use NS&I: National Savings and Investments is fully backed by the UK government, with no limit
business accounts: FSCS also protects some business deposits, but limits and rules may differ
consider banks and credit unions insurance: brokers can advise on extra cover for large or trust-held funds
These steps help safeguard funds and give peace of mind when managing high balances.
