Understanding Types of Crime Insurance for Businesses

Business owners need to protect themselves against various types of crimes, and crime insurance can provide that protection.

Crime insurance can be tailored to fit a business's specific needs, with different types of policies available to cover different types of crimes.

There are several types of crime insurance for businesses, including theft insurance, employee dishonesty insurance, and forgery insurance.

Theft insurance covers loss or damage to business property due to theft, burglary, or robbery.

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Crime insurance is a type of insurance policy that protects businesses from losses due to business-related crimes.

Business crime insurance, also known as commercial crime insurance, can be purchased to safeguard against various types of business-related crimes, including fraud, embezzlement, forgery, misrepresentation, robbery, theft, and others.

Protection through this policy can cover cash, assets, merchandise, or other property loss resulting from these crimes.

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A business can be vulnerable to various types of crimes, and that's where business crime insurance comes in to protect it from losses.

Business crime insurance is a type of insurance policy that covers cash, assets, merchandise, or other property loss due to business-related crimes such as forgery, misrepresentation, or theft.

It can also cover losses from embezzlement, which is a serious issue that can occur when someone in a company misuses or steals its funds.

Business crime insurance is designed to protect a company from various types of business-related crimes, including robbery and fraud.

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Every business should consider commercial crime insurance because employee theft is a common issue that can cost a business more than a normal theft. A study found that theft by an employee costs retailers three times the amount of a shoplifting incident.

Employee theft is a significant concern for businesses, especially retailers. It's not just about the financial loss, but also the damage to a company's reputation and trust with customers.

Commercial crime insurance can provide protection against employee theft and other types of crime. A 2022 market study by Allied Market Research found that globally, interest in crime insurance is growing—along with the cost of crime insurance premiums.

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Crime insurance provides crucial coverage for small businesses, which are most likely to suffer from occupational fraud, resulting in a median loss of approximately $150,000 each year.

There are several types of crime insurance coverage, including first-party and third-party coverage. First-party coverage protects your business from losses resulting from criminal activity, such as employee dishonesty, forgery, and illegal funds transfer. These types of losses are common, with employee dishonesty being the most common type of crime insurance loss, involving a dishonest act by an employee, such as taking cash from the register.

Third-party coverage, on the other hand, protects your business from another business or entity claiming that your business carried out a criminal act. This type of coverage is essential for businesses that deal in cash or online payment systems, as it can help protect your reputation and assets.

Here are some examples of covered losses under crime insurance:

A commercial crime insurance policy is a type of insurance that protects companies from financial losses related to various crimes. It's a crucial part of a company's insurance arsenal.

Crime insurance coverage typically includes protection from employee theft, fraud, robbery, forgery, and electronic crimes. Even with stringent internal policies, risk still exists.

A crime policy generally covers losses caused by specific acts of non-employees, including theft, damage, or destruction of money, securities, and other property. This can happen on the insured's premises or elsewhere, such as while in transit.

Forgery or alteration of negotiable instruments is also covered, including forging the insured's signature on business checks. This type of crime can be financially devastating for companies.

Fraudulent manipulation of the insured's computer system, including hacking and transferring funds to an outside account, is also covered. This can happen through various means, including fraudulent electronic funds transfer instructions sent to the insured's bank.

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Receipt of counterfeit currency by the insured is also a covered loss. This can have severe financial and reputational consequences for companies.

Social engineering fraud is another type of crime that is covered by a commercial crime insurance policy. This type of crime can be particularly difficult to detect and prevent.

Here is a list of some of the specific acts of non-employees that are typically covered by a crime policy:

Crime insurance coverage protects companies from financial losses related to employee theft, fraud, robbery, forgery, and electronic crimes. A business can have stringent internal policies and procedures in place, but risk still exists.

According to Trusted Choice.com, a crime policy generally covers losses caused by specific acts of non-employees, including theft, damage, or destruction of money, securities, and other property on the insured’s premises or elsewhere.

The consequences of these crimes can be financially devastating for companies, leading to severe reputational harm. Small businesses are the most likely to suffer from occupational fraud, representing an average loss of 5% yearly.

Crime insurance is a policy you should consider to protect your business from financial losses resulting from criminal activity. Most commercial property insurance policies don't cover employee-related theft or theft of your items when they are in transit.

Commercial crime insurance covers losses incurred on the property of the business versus off-property. Typically, crime insurance has two areas of coverage: first-party coverage and third-party coverage.

Examples of covered losses include employee dishonesty, forgery, illegal funds transfer, kidnapping, extortion, and ransom, as well as false money order or counterfeit schemes.

Here are some common types of employee theft:

These types of employee theft can have serious consequences for a business, including financial losses and reputational harm.

Purchasing a commercial crime insurance policy can be a bit more involved than other types of insurance, often requiring you to work with an agent.

Insurers consider many factors when providing a quote, including who handles the money, the number of employees, and the line of business.

Commercial crime insurance costs vary depending on the coverage limit and deductible. A $500,000 coverage limit with a $2,500 deductible can cost around $1,450 annually.

The estimated average cost for a $1 million coverage limit with the same deductible is $1,600 annually.

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To get an accurate quote for your commercial crime insurance policy, you'll need to complete a comprehensive proposal form. This form helps your insurance agents and carriers understand the potential risks and threats your business faces.

The form requires you to provide information about your company, such as size, revenues, number of employees, locations, and geographic spread. You'll also need to specify your operational industries and employee access to cash or high-value items.

Systems and controls you have in place to prevent losses are also crucial to include. This includes audit and payment request processes. The more information you provide, the more accurate the quote will be.

Here are the types of information you'll need to provide on the proposal form:

By taking the time to carefully complete the form, you'll be able to ensure you have the right coverage in place to protect against potential losses due to criminal acts.

Purchasing commercial crime insurance can be a complex process, but understanding the costs involved can help you make an informed decision. Obtaining a commercial crime insurance policy often requires working with an agent due to its unique nature.

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The cost of commercial crime insurance varies based on several factors, including who handles the money and the number of employees. Insurers consider a company's history of theft with current employees and its line of business when providing a quote.

A stand-alone commercial crime insurance policy can be quite expensive, with estimated average costs ranging from $1,450 to $2,500 annually. These costs are based on coverage limits of $500,000 to $3 million and a deductible of $2,500.

Here are some estimated average costs for commercial crime insurance policies:

Bundling commercial crime insurance with an existing policy can help save you some money, so it's worth exploring your options.