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.
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
- 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.
See: Foxconn Employee Steals 5,700 iPhones Before Getting Caught
- 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.
See: Court Finds Travelers Crime Policy Covers Email Spoofing Loss
- 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.
See: Chubb’s Crime Insurance Policy Covers ‘Spoofed’ Wire Transfer
- 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.
See: Spoofing Scams Costs Arkansas Companies Millions
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.
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!