Deposit insurance makes sure depositors do not lose their money even if the bank:

1. The point of the insurance is to remove the reason to panic. 2. It has to hold even in the worst case. 3. Deposit insurance makes sure depositors do not lose their money, even if the bank goes bankrupt. 4. So the answer is bankruptcy. _Source: OpenStax Principles of Macroeconomics 3e (CC BY 4.0), Ch 15 'Monetary Policy and Bank Regulation', sections 15.1-15.5_