Foxconn employee steals 5,700 iPhones before getting caught
A former senior manager at FoxConn, the world's largest electronics maker and assembler, was charged with stealing and selling 5,700 iPhones for a value of about $1.56 million.
Commercial Crime insurance
Covers losses due to crimes such as petty theft, fraud, and forgery committed by both your employees and others.
Why it's essential
- Covers financial losses from internal crimes, such as shoplifting, embezzlement, skimming, and more
- Protects against losses caused by crimes committed by others against your business, such as burglary and fraud
- Covers claims alleging that a criminal act perpetrated by your business caused someone else direct financial losses
Who needs this coverage
- Businesses that hire part-time staff or engage in cash transactions
- Companies that manage inventory or have expensive equipment in the office
- Companies that deal with customer data, digital transactions, or financial records
What is Commercial Crime insurance?
Commercial Crime insurance can help protect your company from significant losses caused by both third parties or internal employees. It provides coverage for loss of money or other assets against theft, fraud, forgery, burglary, and more.
First-party coverage protects your business from its own losses that occurred as a result of some type of criminal activity. Third-party coverage protects your business if another business or entity claims that a criminal act perpetrated by your business caused them direct losses.
Although strong internal controls, audits, and a good outside CPA firm can greatly reduce employee theft, even the most vigilant companies have sustained significant multi-million dollar losses. According to a recent report, companies around the globe lost an estimated $4 trillion to fraud in 2017.
The right crime policy can safeguard your business from the risk of corporate asset theft to more sophisticated computer and online schemes.
What's covered
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Employee theft, including shoplifting, embezzlement, and larceny
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Third-party theft
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Forgery and fraud, including digital fraud
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Money laundering
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Counterfeit currency
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Social engineering fraud
What's not included
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Loss of income
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Indirect losses
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Crimes committed by executives, business partners, and employees in coordination with business partners
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Third-party liabilities arising from crime-related losses
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Cybercrime-related losses such as lost patents, trade secrets, and customer lists
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Exposures covered by other insurance policies
Embroker makes it simple
Skip the hassle — get Commercial Crime coverage the easy way and protect your business with tailored coverage.
Quick quotes
Get a quote and buy your policy right away through our digital platform. Get covered in a minutes, not days.
Tailored policies
Package Commercial Crime coverage with other essential coverages, such as Cyber and Workers Compensation.
Expert guidance
Benefit from our team's in-depth knowledge of common industry risks and insurance needs.
Frequently Asked Questions (FAQ)
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Embroker has published a bunch of great resources to help you on your insurance buying journey. Check out the Embroker Resource Hub for articles on coverage, guidance on insurance costs, and what you’ll need to get a quote.
You can also connect with a broker at any time to get help identifying your coverage gaps.
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We advise our clients to consider crime insurance because it’s a simple risk transfer mechanism for theft and manipulation.
Businesses that do the following are more exposed to petty theft:
- Hire part-time employees
- Engage in cash transactions
- Manage inventory
- Have expensive equipment in the office
Companies that deal with the following are more exposed to digital theft and manipulation:
- Customer data
- Digital transactions
- Sensitive financial records
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Fidelity bonds are a sub-type of crime insurance that will protect your business from fraudulent acts committed by your employees.
Fidelity bonds are often considered similar to crime insurance, but there are some crucial differences. For instance, a crime insurance policy will typically have higher limits, but a fidelity bond could reimburse customers who suffered crime-related damages.
You can learn more about fidelity bonds in this in-depth guide: What’s the Difference Between Fidelity Bonds and Crime Insurance?
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Insurers price fidelity bonds and related policies according to business risk and crime coverage amount. Some common risk metrics include:
- Number of employees: Insurers also consider whether the employees work at the same location or at multiple offices.
- Revenue: Companies with high revenue streams generally are more tempting targets for malefactors and have more to lose.
- Office Security: Underwriters like to see some basic safeguards, such as a few strategically-located and unobtrusive cameras.
- Financial Controls: Underwriters also like to see that there are financial controls in place to protect against manipulation.
- High-Value Items: A working prototype of a satellite stored in your office would be high value and could drive premium up significantly.
Businesses looking to save money on commercial crime insurance may look to add coverage to other policies through endorsements. Smaller businesses may add it to their BOP or directors and officers policy. Standalone policies will offer more comprehensive coverage and higher limits but will cost more.
Companies securing fidelity bonds instead of a commercial crime policy will typically have to pay between 0.5% to 2% of the bond value.
For more, read our full article on crime insurance cost.
Commercial Crime illustrated
Explore real-world scenarios of how this coverage has supported businesses
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Court finds Travelers crime policy covers email spoofing loss
The Sixth Circuit appeals court found that American Tooling Centre's loss of $834,107 due to email spoofing was covered by their crime policy.
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Chubb’s crime insurance policy covers ‘spoofed’ wire transfer
Medidata employees were “spoofed” into wiring $5 million to an account they were led to believe was for an acquisition by a series of fraudulent emails that the fraudsters misrepresented were from an outside attorney and Medidata’s own president.
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Spoofing scams cost Arkansas companies millions
In May 2018, Happy Egg Co. of Rogers discovered that they were scammed out of nine payments totaling $972,500 that were re-routed via a change-of-account email from a purported employee.