Commercial crime insurance, or business crime insurance, is designed to protect establishments from financial losses caused by crimes committed by employees or unknown individuals. Such losses are usually not covered by typical commercial property policies. You can purchase commercial crime insurance separately to safeguard against criminal acts like theft, fraud, forgery, and computer scams on your premises.
How Business Crime Insurance Works?
Most business owners and commercial property insurance policies don’t protect a business’s assets against losses arising from theft and other illegal activities. Business crime insurance works to fill the gaps in the coverage offered by these standard policies.
Business insurance providers offer crime insurance, either separately or as an endorsement. Independent commercial crime insurance allows customized coverage for specific types of crime. This is especially useful if your business is more vulnerable to certain specific types of crimes than others.
By purchasing a business crime insurance policy, you are protecting your establishment against financial losses arising from crimes and crime-related activities on the premises. These could include an employee or thief stealing merchandise or cash out of the register, fraudulent electronic payments, forged checks, online scams, and more.
Types of Crime Insurance Coverage
Business crime insurance can protect your organization’s financial security in a variety of different circumstances. Explore common coverage types in commercial crime insurance policies to grasp their scope. Understand what crime insurance covers with a closer look.
Employee Theft
An employee theft crime policy, also referred to as employee dishonesty coverage, provides protection against the theft of money or company property by an employee. While such policies usually also cover crimes committed by people from outside the organization, employee theft coverage is a key aspect of commercial crime insurance.
Forgery or Alteration
Forgery or alteration insurance covers financial losses resulting from the forging or modification of checks, drafts, and promissory notes written by you or someone acting on your behalf.
Theft of Money and Securities Inside Your Premises
This coverage protects your organization’s finances if a thief breaks into the business premises and makes away with cash or securities. The insurance policy provides coverage for any damage sustained to the premises. This includes damage to doors, safes, registers, or cash boxes that the thieves may have broken into.Money and security insurance will not only reimburse the stolen cash but also pay for the above-mentioned property damage.
Robbery or Safe Burglary Inside Your Premises
Robbery and safe burglary insurance covers theft or damage to items other than cash or securities. Your finances will be protected if a thief breaks into your business and robs you or a staff member, forcefully opens a locked safe, or takes the entire safe itself.
Theft of Property Outside the Business Premises
Business crime insurance policies may have a clause covering cash and securities loss off-site. This clause protects cash or assets lost while with an employee or armored car service provider.
Computer Fraud
Coverage against computer fraud protects businesses against certain types of cybercrime. This is when criminals use computers and hacking techniques to steal money or take ownership of an organization’s assets. This could include covertly transferring funds from a company bank account to the scammer’s bank account.
Funds Transfer
Funds transfer fraud coverage provides protection for your business. It safeguards against instances where a fraudster steals your money by impersonating you, an employee, or someone authorized by you. Hackers may target senior managers’ email accounts, instructing employees to transfer funds to a specific bank account.
Most standard business crime insurance policies don’t cover funds transfer fraud. To protect against funds transfer fraud, purchase separate coverage from your insurance provider.
What Is Not Covered by Business Crime Insurance?
While each policy has its own set of terms and conditions, commercial crime insurance policies typically do not cover the occurrences listed below.
- Financial losses caused by a particular employee after the business owner or the organization is aware of crimes committed by that individual.
- Financial losses that are indirect or consequential, including loss of potential income and losses due to business interruption.
- Legal expenses
- If the business crime insurance policy does not include claims/investigative expense coverage, the policyholder is responsible for bearing the expenses. This includes acquiring and demonstrating proof of loss.
- Data theft, such as the theft of sensitive company information, client or vendor lists, intellectual property, or trade secrets.
- Damage to company property caused by fire.
- Legal fines and penalties.
- Employee salaries and bonuses, as well as commissions, fees, and any related lost income.
- Financial losses that are based only on inventory records.
Frequently Asked Questions
How do you buy business crime insurance?
You can buy business crime insurance from your business insurance provider. It can be purchased either as a separate policy or added to your existing policy as an endorsement.
