Glossary
Crime insurance, defined
A commercial policy that reimburses a business for money, securities and property stolen by employees, or by outsiders through forgery, robbery, burglary or computer fraud.
In practice
It fills gaps the other policies leave: property forms exclude employee dishonesty, and liability forms cover damage to others, not loss to you. Coverage is built from insuring agreements chosen separately: employee theft, forgery or alteration, money inside and outside the premises, computer fraud, funds transfer fraud, and, by endorsement, social engineering. Discovery forms respond to losses discovered during the term; loss-sustained forms respond to losses that happened during it. Carriers expect controls: two signatures on large checks, separated duties for receiving and recording payments, and regular reconciliations. Small businesses with one bookkeeper are the most common victims and the least likely to have bought it.
A worked example
Suppose a bookkeeper at a landscaping company writes checks to a fake vendor over three years, totalling $80,000, and the owner discovers it during a bank review. An employee theft insuring agreement with a $100,000 limit pays the loss less a $2,500 deductible. Hypothetical figures.
Applies to: Retail Business InsuranceBusiness Owners Policy (BOP)