Crime Insurance
Commercial crime insurance protects businesses against financial losses resulting from dishonest or fraudulent acts — whether committed by employees, third parties, or a combination of both. Standard commercial property and general liability policies do not cover most crime-related losses, and businesses that rely on those policies alone are often surprised to discover how large a gap exists in their coverage when a theft or fraud event occurs.
Types of Crime Coverage
Commercial crime policies can be structured to cover a broad range of exposures depending on the needs of the business:
- Employee theft — covers direct financial loss resulting from dishonest or fraudulent acts committed by employees, including theft of money, securities, and other property
- Forgery or alteration — covers losses from checks, drafts, promissory notes, or other financial instruments that have been forged or altered
- Computer and funds transfer fraud — covers losses resulting from fraudulent instructions that cause a financial institution to transfer funds out of your accounts
- Social engineering / impersonation fraud — covers losses when an employee is tricked by a fraudulent communication that impersonates a vendor, executive, or financial institution and causes a fraudulent transfer
- Money and securities — covers theft, disappearance, or destruction of money and securities both on your premises and in transit
- Robbery and burglary — covers physical theft of property from your premises by an outside party
- Vendor fraud — covers losses resulting from fraudulent acts committed by vendors or contractors
Employee Dishonesty Is More Common Than Most Businesses Expect
Employee theft is one of the most underreported and underinsured risks businesses face. It occurs across every industry and at every size of organization, and the losses can accumulate over months or years before being discovered. Businesses that handle large volumes of cash, maintain significant inventory, process payroll, or give employees access to financial accounts face elevated exposure. Fidelity coverage — the portion of a crime policy that addresses employee dishonesty — is often the first coverage that should be considered when building a crime insurance program.
Industry Considerations
Crime exposures vary considerably from one business to another. A retail operation faces different risks than a law firm managing client trust funds, a nonprofit handling donor contributions, or a distributor with complex vendor relationships. Social engineering fraud has become particularly costly for businesses across all industries as fraudsters become more sophisticated in impersonating executives and vendors. The right crime insurance program depends on the nature of your operations, the controls you have in place, and the specific financial and property exposures your business carries. A consultation with Etowah Insurance Group will help identify your most significant crime exposures and structure coverage that addresses them appropriately.
