Commercial Crime Insurance Coverage: The Ultimate Guide

Did you know that money and securities are excluded in a standard commercial property insurance policy? This means your business wouldn’t be covered if certain criminal behavior resulted in a loss of money or securities. The good news is that there’s another type of policy that can protect you in this situation. Here is what you need to know about commercial crime insurance.

What is commercial crime insurance?

Employee Crime Coverages

A commercial crime policy protects you from criminal acts that result in a loss for your business. The policy includes separate sections that detail the types, locations, and perpetrators of crimes that would be covered.

A commercial crime policy will pay for loss of money, securities, and other property resulting from theft committed by an employee. Theft is broadly defined; it includes forgery
or any criminal employee actions that result in a loss of money. In essence, this first portion of the policy covers wrongdoings by any of your employees, but does not cover non-employees.

Non-employee Crime Coverages

The forgery coverage in commercial crime insurance covers losses resulting from criminal action from a non employee.  If you attempt to cash a check and discover that it is forged, and are unable to get the funds from the forger, this coverage kicks in. This includes checks written to you or to one of your agents.

The next section of a commercial crime policy describes what is covered if there’s a theft of money or securities inside the premises of your business or bank. If anything is stolen from within your property, it is covered with a combination of your commercial crime policy and comprehensive property policy. Plus, if your money is stolen from the bank, it is also covered. This extends the coverage mentioned above relating to theft from employees to include theft committed by any person within the business premises.

This portion also extends to financial loss from damage to your property resulting from theft. For example, if someone breaks a window to gain entrance to your premises and steal money inside, this policy would cover the money that was taken, as well as the cost to fix the window.

Additionally, this section covers damage to a lock or safe inside the premises resulting from theft. If someone breaks open a safe or lock to gain access to your money while inside the premises, it will be covered by this policy.

Additional Coverages

Commercial crime coverage includes theft that occurs while your money is in the custody of a messenger or armored motor vehicle. It also includes disappearance or destruction while in the care of a messenger or armored vehicle. For example, if you give an employee a money bag to take to the bank and they lose it, that loss would be covered under this policy.

Computer fraud is also covered in a commercial crime policy and is a necessity for many businesses. Under the computer fraud portion, the policy will pay for loss of or damage to money, securities, and other property resulting from the use of any computer to fraudulently transfer property from inside your business or banking premises. This language is very important because it specifically provides coverage only for computer fraud that occurs inside the premises. Outside hackers who obtain access to your computer system would not be a covered loss under this policy.

What does commercial crime coverage exclude?

Despite all of these coverage inclusions in the commercial crime policy, your insurance will not cover theft from you or your partners. If your business partner steals from the company, your insurance policy will not cover that theft.

The policy will likewise not cover any theft resulting from an employee that you know has a history of theft or other dishonest acts. This term “dishonest acts” can be interpreted with a very broad lens, but most likely applies to criminal acts of dishonesty. A criminal act of dishonesty is something along the lines of fraud, and would require an actual conviction. The best way to ensure you know how your insurance broker defines a “dishonest act” is to have them add a specific definition to your policy.

Why Commercial Crime Insurance Is Important For Small Businesses

For small business owners, one criminal act could mean the difference between keeping your business afloat and shutting down altogether. Crime rates have increased since the beginning of the COVID-19 pandemic. A standard commercial property policy won’t protect you from the different criminal acts that could cause a serious financial loss. Only commercial crime coverage can keep your business safe from the criminal actions of others.

Need Help with Crime Insurance?

If you are concerned about criminal actions harming your business, call one of our experts to learn how a commercial crime policy would help.