Commercial Crime Insurance

Commercial crime insurance can protect your business from losses due to crime-related issues that other insurance products don’t cover, such as third-party fraud or employee fidelity.

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.

We wrote this guide to help you, the reader, understand both the basics of commercial crime insurance as well as some more advanced considerations. Our hope is that you walk away from this article a more empowered buyer, with a better understanding of the risk you can transfer to other parties via the commercial crime product.

If you’d like help, we’d invite you to talk with a broker or get started by creating an Embroker account. Our highly experienced insurance experts will work with you to gain a deep understanding of your unique needs before negotiating a customized policy on your behalf. For more clarity on pricing, your business will be benchmarked against similar businesses to identify any unforeseen exposures and premium savings opportunities.

What is Commercial Crime Insurance?

Whether it’s crimes committed by third parties or your own employees, crime insurance can help protect your company from significant losses.

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.

Who Needs Crime Insurance?

We advise our clients to consider crime insurance because it’s a simple risk transfer mechanism for theft and manipulation.

Businesses that:

hire part-time
employees
manage
inventory
engage in cash
transactions
have expensive equipment
in the office

are more exposed to petty theft.

Companies that deal with:

customer
data
digital
transactions
sensitive financial records

are more exposed to digital theft and manipulation.

Why Do Businesses Need Crime Insurance?

In order to mitigate this risk, businesses buy insurance directly related to crime. Losses related to criminal acts can frustrating and costly. In the digital age, manipulation and digital crime can be disruptive and this simple line of insurance can help.

What Does Crime Insurance Cover?

At the most basic level, crime insurance typically covers dishonest acts like petty theft and fraud committed by part-time staff, volunteers or contractors, property damage, and burglary.

As the digital world has evolved, so has crime insurance. Now crime insurance can also cover digital crime, including theft of business information, money or property by hackers or con artists.

This often includes acts of forgery, and any instances of counterfeiting and impersonation that can do harm to your business.

What Doesn’t Crime Insurance Cover?

One common misunderstanding regarding crime insurance is related to computer fraud. Commercial crime insurance will often cover losses in which employees or third party hackers committed fraudulent or theft via computers, but crime insurance will typically not cover losses as a result of data breaches – this is covered separately, under your cyber liability insurance policy.

If you’re concerned about digital theft, manipulation and attacks, we encourage you to explore both Crime and Cyber insurance concurrently.

Highly-Publicized Examples of Crime Insurance at Work

Commercial Crime Insurance Costs

As with all other types of insurance, companies price fidelity bonds and related policies according to business risk and 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.

Getting Started

Now that you have a better understanding of commercial crime insurance, you may be wondering how all of this affects your business and where to go from here. If you need more help or information you can reach out to our team of expert brokers. If you prefer to get started on intelligent quotes, you can get started by creating an Embroker account today.

Having a quality commercial crime insurance policy in place and a broker who can help you navigate the terms and conditions as well as the the claims process can save you money and, more importantly, time.

Embroker is the easiest way to intelligently insure any business. We’re here to help!