I remember naively believing that FDIC covered theft. There are little notes and placards posted all over banking websites and physical locations advertising t

I remember naively believing that FDIC covered theft. There are little notes and placards posted all over banking websites and physical locations advertising that your funds are insured by FDIC. I'll bet most people who see those signs believe the same thing I believed: that "insured" in that context meant your funds were protected. Against theft; fire; fraud; etc. Right? But FDIC _doesn't_ cover theft. Or anything else. It only covers bank failure. Bank runs were a real problem back in the old days, and the fear of it drove most people to leave their cash in mattresses. So FDIC was created to alleviate those fears and get cash back into the banks. That was, and is, its only purpose. Not that that isn't a useful thing. It certainly came in handy again during our last recession. But this knowledge raises an important question. If FDIC is the only insurance I've seen advertised by banks, and it only covers bank failure ... what covers everything else? I assume, hopefully, that banks have private insurance policies or something. Maybe they're legally required to have a private insurance policies. I just don't know. I bet most people don't know. Very interesting stuff.