We are being pressed by an attorney to disclose what type of insurance we have on our safe deposit boxes, and what are our policy limit is. We advise our customers to obtain coverage, but this attorney said that if we already have coverage, why should he pay for his own coverage. As do most banks, we only carry Section A coverage, covering our legal liability. We do not carry Section B coverage, which addresses customer property. Do most banks have the same coverage? And how do you handle questions from customers, particuarly attorneys?

Security Guy,
According to the Insurance Information Institute in New York, banks do not insure the contents of safe deposit boxes. Most banks are only liable for loss of contents if you can prove they were negligent and failed to use reasonable care to prevent a loss. Coverage is available under a homeowner's or renter's insurance policy, but it's limited to what the policy covers. There's a deductible in the standard policy and you'd be covered for the disasters listed in the homeowner's policy.
We tell our clients (as part of the safe deposit contract) that the bank does not insure the contents of a safe deposit box, and neither does the FDIC. We also have signs posted to that effect in our safe-deposit booths. This became a major issue after 9-11, when a court held a bank that was destroyed in the atttacks liable to clients for FDIC insurance on their boxes because the safe deposit contract was unclear. I think the attorney is just being argumentative - I mean, really... what is valuable about a safe deposit box other than its contents?! I would just tell the attorney that neither the bank's insurance nor the FDIC cover the contents of his box, and he will need to arrange for that separately.
Leslie

Borderline rant approaching in the form of a less polished version of Leslie's advice:

My explanation would be: "Any insurance the bank buys is for the benefit of the bank, not for the benefit of the renter. Whether your property is in your living room or a safe deposit box you rent from us, we do not insure it." Having equally plain language in a contract, as Leslie advises, is far better than relying on even my terse verbal explanation.

If I realized that a safe deposit attendant was trying to be more serice oriented and was attempting to explain the A vs. B coverage, we would be discussing his career plans. Customers who get anything more than a plain and simple, "We do not insure your property" will not remember all the qualifiers and caveats. They will inevitably say they were only told it was insured, not about the conditions precedent to the coverage.

The safe deposit function is not appreciably more dangerous than several other bank operations and I am sensitive about training techniques that promote an inordinate amount of fear in bank personnel. However, this is an area where careless verbal comments can become warranties and the bank can become the de facto insuror.

Since the bank is not supposed to have any idea what a customer has in a safe deposit box, how in the world would the bank know how much to insure it for? (Sorry for ending the sentence with a preposition.)

I meant collective insurance on all boxes, not individual ones.

I think it was put very eloquantly above - the bank does not have insurance on safe deposit boxes. As far as the liability limits that a bank may insure it's property and employee actions for - it's just plain "none of his business". I would question why a customer would be pressing this issue - what is he putting in the box??? Sound suspicious????