What is Crime Coverage?
On an insurance policy Crime Coverage is a type of commercial insurance coverage designed to protect businesses from financial losses resulting from criminal activities such as theft, fraud, and forgery. This coverage is particularly important for businesses that handle money, securities, or other valuable assets, as it provides protection against both internal (employee-related) and external (third-party) crimes. Crime Coverage is part of the coverages included in a Commercial General Liability insurance policy.
Here’s a breakdown of common incidents that Crime Coverage may protect against:
1. Employee Theft or Dishonesty:
• Covers losses arising from dishonest acts by employees, such as embezzlement or theft of company property or funds.
2. Forgery or Alteration:
• Protects against losses due to the forgery or alteration of checks, promissory notes, or other financial instruments by third parties or employees.
3. Robbery or Burglary:
• Provides protection for property taken by force or through illegal entry into the business premises.
4. Computer Fraud:
• Covers losses resulting from the illegal transfer of money, securities, or other assets through the use of computers. This is particularly important for businesses with online or electronic banking activities.
5. Funds Transfer Fraud:
• Protects the business from losses due to fraudulent instructions to transfer funds, whether these instructions come from outside the business or through manipulation of legitimate communications.
6. Credit Card Fraud:
• Provides protection against fraudulent charges made by third parties using stolen or falsified credit cards.
7. Counterfeit Money:
• Covers losses resulting from accepting counterfeit money in exchange for products or services.
8. Social Engineering Fraud:
• Some policies can include coverage for losses stemming from deception schemes where employees are tricked into transferring funds or assets to fraudulent accounts.
Why Is Crime Coverage Important for Businesses?
Crime can occur even with strict controls in place. Without crime coverage, businesses may be financially liable for the losses caused by such events, which could lead to severe financial strain or even bankruptcy, depending on the extent of the crime.
In industries that handle significant amounts of cash, valuable assets, or sensitive data, crime coverage serves as an essential layer of protection.
Exclusions
It’s important to note that crime coverage typically does not cover indirect losses such as reputational harm or future lost profits due to a crime. Additionally, some types of fraud or criminal activities may require specific endorsements or additional coverages.
This coverage can be a crucial part of a broader risk management strategy for businesses of all sizes and across various sectors.
You can get a quote here or call us for more details at 416 512 8060.
