To simplify insurance purchases for smaller banks, a Citigroup unit has introduced a product that wraps seven liability and crime insurance lines into one policy.

Called Travelers Advantage for Financial Institutions, the policy covers director's and officer's liability, employment practices liability, fiduciary liability, banker's professional liability, financial institution bond, computer crime, and ransom and extortion coverage.

Banks may pick what they need and choose individual coverage limits without creating a spider web of individual policies to cover business risks.

"There's one coverage, one policy, one carrier, one premium payment, and one set of standards," said Andrew Badalucco, a vice president at Travelers Bond, a division of Citigroup's Travelers Property Casualty.

The idea has already struck a chord with a handful of banks.

First Virginia Banks Inc. bought the coverage because renewing a comprehensive single policy is much simpler.

"Spread out your coverage decisions, and they get made independently of each other," said Judith A. Holmes, risk manager for the Falls Church, Va., banking company and agent for its insurance unit. Making one decision "that addresses all or most of your risks in these major categories once a year makes for a better approach," she said.

Ms. Holmes said buying a broad policy also protects the company against gaps in coverage that can emerge when policies expire on different dates.

Community banks must make complicated insurance decisions even though they have fewer specialized risk management officers who know the nuances of insurance policies, said Susan Horsfall, who sells insurance as an agent for National City Corp. in Cleveland.

The Travelers product is a step toward simplicity at a time when community banks need coverage as sophisticated as that of their bigger rivals, she said.

Ms. Horsfall said two of her community bank clients, which each have less than $500 million of assets, plan to buy the Travelers product when their current insurance is up for renewal this year. Because premiums for such broad coverage are large, the policy is also profitable to sell, she said.

Though policies for the two community banks have not been formally priced, Ms. Horsfall said the coverage is likely to cost more than similar insurance offered through national or state trade associations. But she said the coverage is broader and the price will be competitive with commercially available insurance.

Mr. Badalucco said combining seven types of insurance should produce savings for most banks. Depending on what options a bank selects, premium savings could be as high as 5%, he said.

One cost-saving feature in the policy is umbrella "excess coverage" protection.

Typically, a bank pays to add coverage on each line of insurance it is buying, Mr. Badalucco said. But with this package of policies, a bank may buy extra coverage that "floats" over all the policies. If a bank needs more coverage in a particular area, this extra coverage may be tapped, he explained.

First Virginia's Ms. Holmes described this feature as unique and attractive. She said she expects to sell the insurance to many of her smaller-bank clients.

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