As a business owner, keeping your business safe should be your top priority. That’s why it’s essential to make sure you’re protected against a wide variety of financial losses that can end up wreaking havoc on your bottom line. There are several forms of commercial crime that can fall on any business at any time from theft to burglary and forgery to fraud.
Even the most cautious and prepared businesses can find themselves the victim of commercial crime. And while there is the risk of external issues to worry about, such as cyber crimes and robberies, more often than not, dealing with employee crime is the cause of more concerns, especially for smaller businesses.
The likelihood that a business will fall victim to an employee fraud scheme, for example, is surprisingly high. According to the U.S. Chamber of Commerce, three-fourths of employees have stolen from their employer at least once. The Chamber also found that up to 30% of business failures may be the result of employee fraud and abuse.
This is where commercial crime insurance comes into view. This well-rounded approach to protecting against employee crime can help save business owners’ stress when dealing with internal issues. Here’s a better look at a commercial crime policy.
What is Commercial Crime Insurance?
Commercial crime insurance protects from financial losses related to crimes, including theft, burglary, robbery, forgery, and fraud. While most commercial property insurance policies don’t cover losses from crimes committed by employees and offer limited coverage for losses committed by third parties, commercial crime coverage can sub-in to provide the protection a business needs from crime-related losses.
Commercial crime insurance can cover a business’s property, merchandise, cash, and securities against forgery, embezzlement, and theft by employees. It can also protect a business from non-employee third parties who commit forgery, fraud, or burglary.
What Does Commercial Crime Insurance Cover?
Commercial crime insurance usually includes coverage for:
- Employee Dishonesty: Any loss or damage to money, securities, or other property caused by theft or forgery by employees. If a business is aware that an employee has previously stolen from the company, losses caused by that employee may not be covered.
- Theft of Money from Inside the Premises: This covers the loss of money or securities from theft or destruction when the money is located on premises. It can also cover damage to the building as well as damage to a locked safe, vault, or cash register resulting from a theft attempt.
- Forgery: If checks or other promises to pay money are drawn on an account and forged by someone other than an employee, commercial crime insurance will cover the losses. This insurance will also provide payment for any legal fees needed to defend against lawsuits if a company is sued for refusing to pay for a forged check.
- Computer Fraud: This policy also covers losses or damage from the fraudulent transfer of a business’ money, securities, or other property to a place outside its premises or bank resulting from the use of any computer.
- Robbery or Safe Burglary: Robbery is a more specific kind of theft that involves the taking of property by force or under the threat of force. Safe burglary involves taking the property from inside a locked safe. Crime insurance covers the loss of other property from a business’ premises via robbery or safe burglary by non-employees.
What Are Key Exclusions of Commercial Crime Insurance?
Unfortunately, there are some gaps in coverage that insured parties should understand. Reviewing an existing policy can help by highlighting additional coverage that may still be needed.
- Crimes, theft, or other actions that a business or business partner commits. It also does not cover actions committed by employees in coordination with any of a business’ partners.
- Liabilities a business incurs to third-parties due to crime-related losses.
- Accounting errors.
- Loss of income due to stolen property or business interruptions from crime.
- Any loss resulting from data breaches or the loss of patents, trade secrets or customer lists are not protected by commercial crime insurance.
In conclusion, it’s important to note that no business is immune to crime. If a business has employees or stores product inventory, a commercial crime policy may be a wise choice to purchase. When it comes to keeping a business safe and protected against financial losses due to theft, burglary, forgery, and fraud, commercial crime insurance can provide the financial protection a business needs to recover from an unexpected crime.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.