Commercial Crime Insurance Policy Information
Commercial Crime Insurance. Whether you own a large organization or a local establishment, no matter the size of your business or the industry you're in, securing the safety of your company is extremely important. Crime is one of the biggest risks that all business owners face, and with increasing crime rates, protecting your establishment from crime, burglary, robbery, theft, fraud, and forgery is vital.
In order to get the protection you need, commercial crime insurance is one of the best investments you can make.
The need for crime coverage arises from exclusions found in commercial property forms. Most risks of physical loss on commercial property forms cover theft of merchandise and business personal property by other than the employee.
What exactly is commercial crime insurance? What does it cover? Read on to find the answers to these questions and more so that you can ensure your business is properly protected from the unexpected.
Commercial crime insurance helps protect businesses against your business against, burglary, robbery, forgery, employee dishonesty and other crimes - with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked Commercial Crime insurance questions:
- How Much Does Commercial Crime Insurance Cost?
- What Is Commercial Crime Insurance?
- Who Needs Commercial Crime Insurance?
- What Does Commercial Crime Insurance Cover?
- What Are The Commercial Crime Insuring Agreements?
- What Are Common Crime Gaps In Commercial Property Insurance Policies?
- What Isn't Covered By Commercial Crime Insurance?
How Much Does Commercial Crime Insurance Cost?
Commercial crime insurance costs vary widely and range from under $47 into the thousands per month - based on the type of business, location, industry, size, company financials and more.
What Is Commercial Crime Insurance?
Commercial crime insurance is a type of insurance coverage that is specifically designed to protect businesses from the financial losses that are associated with burglary, theft, fraud, and even forgery.
While the majority of carriers that offer commercial property insurance will cover the losses that occur when a third-party steals from your business, often, that coverage is limited.
Additionally, this type of policy does not provide coverage for crimes that are committed by employees. In order to ensure that you are protected from these types of incidents, you would need commercial crime insurance.
For example, if you own a clothing store and an associate steals $10,000 in merchandise from you, your commercial property insurance policy may not cover the losses, but a commercial crime insurance policy would. This type of policy covers your commercial property and merchandise, as well as cash and securities from losses that are associated with employee-related theft, forgery, or embezzlement. Additionally, it can protect you from third parties who are not employees and steal from your company.
Commercial crime insurance can be purchased as a stand-alone policy, or it can be added to a commercial package policy.
Who Needs Commercial Crime Insurance?
Though you have made every effort to protect your business from theft, robbery, fraud, and forgery - you've done extensive background checks on all of your employees, have a state-of-the-art security system installed, and follow stringent protocol - there is no way to completely eliminate the risk of crime.
For example, a trusted employee who has fallen on hard times may decide to steal from you out of desperation, or a third-party could possibly break into your facility and steal your merchandise. If you are the victim of these types of scenarios, you could be looking at serious losses. Since a standard commercial property insurance policy will not cover the losses that are associated with employee-related theft and only provide minimal coverage for third-party robberies, investing in a commercial crime policy is a sound investment.
By having this kind of commercial crime coverage in place, you'll have peace of mind knowing that if you do become the victim of fraud, forgery, theft, or robbery, you will have a way to recoup the money that was stolen from you.
What Does Commercial Crime Insurance Cover?
If the coverage is written stand-alone, there is only one declarations page plus the policy form. If the commercial crime insurance coverage is written as part of a package policy, the declarations page and coverage form must be completed with the package declarations page and the common policy conditions.
The commercial crime insurance forms are composed of eight separate insuring agreements. Coverage for a particular insuring agreement is provided when a limit is shown beside the insuring agreement on the declarations page.
A limit or the words "Not Covered" should be shown beside each insuring agreement to prevent confusion. Later in this topic, each of the insuring agreements will be discussed, but first the items that are common to all insuring agreements will be reviewed.
Commercial Crime Insurance Policy Conditions
The following conditions apply to all insuring agreements. Under the discussion of each insuring agreement, additional conditions specific to that particular commercial crime insurance insuring agreement are addressed:
Additional Premises or Employees
If the named insured acquires new premises or hires additional employees they are automatically covered under the crime coverages without additional premium charge. There is no requirement that the insurance company receive notice.
Concealment, Misrepresentation or Fraud
When fraud is perpetrated by the insured, coverage is void. Intentional concealing or misrepresenting of material facts about property covered, concerning interest in the covered property or in any claim also voids coverage. When coverage is voided, all existing and future claims are excluded.
Consolidation or Merger
The insured is given 90-days' coverage for newly acquired entities, premises, assets or liabilities of another business, including its employees. The insured must notify the insurer - in writing - of the addition. The insurer can grant or deny coverage after the 90 days.
The insured is required to work with the insurance company in satisfying the terms and conditions of the policy.
Duties in the Event of Loss
The police must be notified of any loss unless the loss is caused by employee theft. The insured must agree to be examined under oath, be willing to sign any statement made, and provide records that the insurance company can copy. Within 120 days of the loss, the insured must provide a sworn statement of loss that includes all details of the loss.
Employee Benefit Plans
When an employee benefit plan is a named insured on a policy, the only insuring agreement that applies to that plan is the employee dishonesty insuring agreement. The coverage applies only to the funds and property of the plan, not the property used to administer the funds. If the employee benefit plan is not the first named insured, any payment made to the first named insured for the fund cannot be commingled with other funds.
If there are two or more employee benefit plans listed and both suffer losses, payment is shared based on the total amount of funds in each plan. If there is a deductible on the declarations, it does not apply to any loss to the employee benefit plan.
Extended Period to Discover Loss
The insured has one year after the expiration date of the policy to discover a loss that occurred prior to the expiration date of the policy. This period ends immediately when another crime policy is purchased at the same time the first policy terminates.
When there are multiple named insureds, the first named insured acts for all named insureds for premium payments, notices of cancellation, and other named insured functions. Knowledge of one named insured is considered knowledge of all named insureds; an employee of one named insured is considered an employee of all named insureds; and the limit of insurance applies to all named insureds as a group.
The Extended Period to Discover Loss applies separately to each named insured. A payment can be made to the first named insured to satisfy the claims of all named insureds except when the named insured is an employee benefit plan. The plan must receive payment directly.
Legal Action Against Us
No insured can sue the insurance company until all terms and conditions of the policy have been satisfied. If a suit is filed, it must be filed no earlier than 90 days following the filing of the proof of loss but also no later than two years after the date of discovery. If local law extends the time period, the local law prevails.
If the insurance company broadens coverage without a premium charge, during the policy period or within 45 days of the effective date of the policy, the broadened coverage applies.
A good example is when an insurance company adopts a new edition of a coverage form and the new edition becomes effective during the insured's policy term. The broadened features of the new edition apply automatically to the insured's coverage even though it is not endorsed for the new features.
Loss Covered Under More Than One Coverage of This Insurance
If there is coverage for a loss under more than one of the crime insuring agreements, the limits under the applicable insuring agreements are added together. The maximum payment is limited to the actual loss sustained or the combined limit whichever is less.
The only losses covered are those sustained during the policy period and discovered during the policy period or the one-year extended period. This condition must be read in conjunction with the Loss Sustained During Prior Insurance Conditions.
Loss Sustained During Prior Insurance
If, and only if, the insured has had no lapse in coverage, the insured has coverage for losses sustained in prior policy terms that are discovered in the current policy term.
If the prior insurance and the current insurance are with the same carrier (or affiliate), the limit of insurance is the higher of the limit on the current policy or the policy in effect at the time of the occurrence. However, if the prior insurance was with a different carrier, the limit of insurance is the lesser of the two limits.
Insurance is excess over other insurance or indemnity, less deductible, whether or not the other insurance or indemnity is recoverable, unless the coverage under this policy is identical to coverage on another policy. Under the exception, the loss is handled proportionally.
Ownership of Property: Interest Covered
Owned or leased property, property being held for another, and property for which the insured is legally liable are covered.
The insured must have records on hand to substantiate any loss reported.
Recoveries that the insurer makes (less recovery expenses) are returned to the insured until the insured is made whole (less the deductible). The remainder is paid to the insurer until it is made whole. If there is still money left, the named insured is paid up to its deductible. The insured keeps any excess. Recoveries do not include reinsurance.
The United States, its territories, possessions, Puerto Rico and Canada. Some insuring agreements have expanded territories but none are more restrictive.
Transfer of Your Rights of Recovery Against Others to Us
All rights of recovery (subrogation) revert from the insured to the insurance company. The insured cannot waive this right for any reason.
Money is valued up to face value. Foreign currency is valued at face value or its U.S. equivalent on the date of discovery. Securities are valued as of the end-of-day close on the date of discovery.
Damaged property is paid on replacement cost if repaired or replaced; otherwise at actual cash value. All payments are subject to the limit of insurance on the policy.
What Are The Commercial Crime Insuring Agreements?
The commercial crime insuring agreements specify what crimes the insurance company has agreed to pay for in exchange for the premium:
- EMPLOYEE THEFT: This insuring agreement covers loss to money, securities and other property. It covers the unlawful taking of covered property by employees. The covered property can be the insured's property or property of others being held by the insured. It applies whether one or more than one employee is involved in the loss. This is the only insuring agreement that includes acts of employees. Employee theft coverage includes employee forgery.
- FORGERY AND ALTERATION: his insuring agreement covers forged or altered checks of the insured by someone other than the named insured, employees, managers, directors, trustees or representatives. The check could be drawn on the insured's account, another party's account, or an account that no longer exists. This is an unusual crime coverage in that defense coverage is included. If the insured refuses to honor a document considered forged, there is coverage for the legal expenses the insured may incur because of the refusal.
- INSIDE THE PREMISES-THEFT OF MONEY AND SECURITIES: The primary coverage is for the theft of money and securities within the insured's premises or banking location. The person committing the crime must be physically inside the premises. In addition, damage to the interior and exterior of the building and damage to locked safes, vaults, cash boxes, etc., is covered if the damage occurs during a theft or attempted theft. The exterior building damage is covered only if the insured owns the building or is legally liable for the damage.
- INSIDE THE PREMISES-ROBBERY OR SAFE BURGLARY OF OTHER PROPERTY: This is a very limited insuring agreement. The activities are very specific. It covers robbery, which means that an employee who is not a watchperson or janitor must be on the premises for coverage to apply. It also covers safe burglary, which means the safe must show signs of forcible entry or must be totally removed from the premises if coverage is to apply. It is also specific to what items are covered. Only other property is covered. This means that there is no coverage for money or securities.
- OUTSIDE THE PREMISES: There are two parts to this insuring agreement. The first part provides coverage for theft, disappearance and destruction of money and securities while outside the premises with a messenger or in the custody of an armored car company. The second part provides robbery coverage for other property while with a messenger or in the custody of an armored car company. The conditions and exclusions that apply to inside the premises-robbery or safe burglary of other property insuring agreement also apply to this insuring agreement with one exception. The transfer or surrender of property exclusion does not apply if a messenger is unexpectedly threatened with bodily harm or damage to his or her conveyance.
- COMPUTER AND FUNDS TRANSFER FRAUD: Money, securities and other property that are transferred by the computers on the insured's premises or banking premises to a location away from the premises are covered. Money and securities that are transferred out of the insured's financial institution's transfer account based on a fraudulent instruction, is also covered. The coverage is worldwide and the computer that is compromised could even have been accessed from an off-site location.
- MONEY ORDERS AND COUNTERFEIT MONEY: Coverage applies if counterfeit money is accepted in exchange for purchases. There is also coverage for money orders accepted by the insured that are not accepted when presented by the insured for payment. The coverage is limited to the United States, its territories and Canada.
What Are Common Crime Gaps In Commercial Property Insurance Policies?
Theft or destruction of money and securities, computer fraud and employee dishonesty are not covered in a typical business property insurance policy. Some of the more common gaps in commercial property insurance for commercial crime insurance include:
Most property, auto and inland marine policy forms exclude dishonest acts of employees in the theft, or misappropriation of employer funds, merchandise or secrets.
MONEY, BULLION AND SECURITIES
Commercial property basic, broad and special cause of loss forms exclude money, bullion and securities as covered property; thus, their theft or even their destruction by fire or another cause of loss is not covered.
Inland marine policies or specialty endorsements may give back limited bullion coverage but, generally, no actual money or securities coverage is provided.
Jewelers block policies may cover raw gems and precious metals, but again they do not cover currency or securities.
THEFT OF GOODS
Theft of goods is covered under most inland marine coverage forms and the commercial property special cause of loss forms. However, the coverage is subject to coinsurance requirements. Crime forms allow a customer the option to choose a limit.
Because most theft losses represent a small percentage of the actual property, the premium savings can be substantial.
What Isn't Covered By Commercial Crime Insurance?
The following exclusions apply to all commercial crime insurance insuring agreements. In the specific insuring agreements discussions, exclusions specific to the particular insuring agreement are discussed.
Acts Committed by You, Your Partners or Members
Any theft or dishonest act committed by the named insured, a partner or a member of the named insured LLC is excluded whether the act is committed alone or with an outside individual or employee.
Acts Committed by Your Employees Learned of by You Prior to the Policy Period
If the named insured, its officers, directors, trustees, partners or members are aware of an employee's history of dishonest acts, any dishonest act committed by that employee is excluded. The one exception is when the person who knows about the employee's history is colluding with that employee to commit a dishonest act.
Acts Committed by Employees, Managers, Directors, Trustees or Representatives
Dishonest acts committed by employees, managers, directors, trustees or representatives are not covered. In addition, dishonest acts committed by such persons working with outside individuals are also excluded. This exclusion DOES NOT apply to the employee dishonesty insuring agreement.
Confidential or Personal Information
The crime policy is not designed to cover losses due to identify theft. Any loss caused by or resulting from any unauthorized disclosure or use of the named insured's or others' confidential or personal information is not covered.
Examples of such information are patents, trade secrets, processing methods, customer lists, and other types of financial or personal information.
Data Security Breach
No coverage exists when access is in any way provided so that personal or confidential information is disclosed.
When government seizure, forfeiture or similar government taking or destruction causes a loss, it is not covered.
Loss of income, legal liability and the costs incurred to establish the amount of a loss are not covered.
Legal expenses are not covered under any insuring agreement except the forgery and alteration insuring agreement.
There is no coverage for any nuclear-related loss.
There is no coverage for any loss or damage resulting from pollution.
War and Warlike Actions
There is no coverage for losses caused by war or warlike actions. This exclusion does not exclude terrorism. A separate endorsement must be attached to exclude terrorism.
Commercial Crime Insurance - The Bottom Line
In order to find out more about commercial crime insurance and how much coverage you should carry, speak to a broker that specializes in business insurance.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Small Business Insurance
Protect your company and employees with the right commercial insurance policies. Read informative articles on small business insurance coverages - and how they can help shield your company from legal liabilities.
- Small Business
- Business General Liability
- Business Interruption
- Business Liability
- Business Owners Policy (BOP)
- Certificate of Insurance
- Commercial Auto
- Commercial Crime
- Commercial Package Policy
- Commercial Umbrella
- Comprehensive General Liability
- Directors and Officers Liability
- Cyber Liability
- Employment Practices Liability
- Event Cancellation
- Fiduciary Liability
- General Liability
- Home Based Business
- Independent Contractor
- Liability Insurance Certificate
- Liability Insurance
- Ocean Marine
- Professional Liability
Your small business faces many potential disasters including: fire, floods, theft, equipment breakdown, lawsuits from clients or customers and current & former employees. Any many other risks you haven't even thought about.
A small business commercial insurance program should provide protection for both larger and smaller disasters. The obvious things like fire, flood and theft most business owners think about... but what if a hacker infects your computers with a virus - and files containing private customer information like credit card and Social Security numbers are stolen?
Who is going to pay to fix your customers credit rating etc...? Will your insurance pay for the cost? You need to know that.
Your commercial insurance program should cover events that can close down your company, or cause it to lose revenue. Anything less than that is not enough coverage. Commmercial insurance doesn't cover everything, and all policies have exclusions and limits.
You need a written plan that allows you to get your operations back up and running as quick as possible.