Last updated: November 29th, 2022
Reviewed by
Paige Geisler
Licensed Insurance Agent
Even for those who pay for commercial property insurance to protect against certain types of property theft, commercial crime insurance is essential for any business owner wanting to cover stolen cash or employee theft.
Table of Contents
Business or commercial crime insurance helps protect companies from financial theft and other types of unsavory fraudulent criminal activity conducted by employees or outsiders. This type of coverage can even help with instances of fraud or theft where employees and third parties work together.
Business crime insurance covers some of the gaps inherent in general liability and commercial property coverage.
The main areas of coverage include:
While it does fill in the gaps of employee theft and certain types of fraudulent activity, business crime insurance often doesn’t cover certain indirect losses, owner theft, or certain cybercrimes.
More specifically, exclusions may include:
Typically, the most common types of theft aren’t included in business insurance policies. Theft of equipment or physical assets (not cash) located on the business’s property may be covered by commercial property insurance when it’s due to a robbery or burglary. However, this doesn’t include any type of employee theft or theft of financial assets.
Typical business insurance doesn’t cover employee theft. Business crime insurance, on the other hand, does. However, these policies usually come with some provisions.
A subtype of crime insurance called fidelity bonds is designed more specifically to cover losses due to employee fraud and can include customer or client reimbursement to compensate for damages due to crime. Fidelity bonds typically have lower coverage limits than business crime insurance.
Whether your business needs a crime insurance policy is up to you and your business type and industry. Some business types are at higher risk of employee or cyber theft than others.
According to some surveys, employee theft affects approximately three out of every four businesses in the United States.
Here are a few factors that may put you and your business at higher risk of theft or fraud:
Because many factors are at play in choosing the right amount and types of business crime insurance coverage, it’s best to speak to a licensed insurance agent to discuss the business policy combinations for your specific needs, exposures, and risks.
You will want to look into subtypes or enhancements to your current policy if options such as cybercrime liability insurance or fidelity bonds are right for you. You will also need to decide if you would like your policy to cover only crimes that occur and are discovered during your coverage period, through what is called loss sustained coverage, or if you would prefer discovery coverage that covers all theft discovered during your coverage period, regardless of when it occurred.
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
Paige is an assistant agent for State Farm and is licensed to sell property and casualty, health, and life insurance in Virginia. She handles all different types of insurance and financial services and is currently working on a securities and bonds license. Paige has a degree from Radford University in English and is a certified notary.
