Business Crime Insurance Coverage

There are a number of threats and vulnerabilities that every business owner has to deal with. Owners need to take necessary steps in order to ensure the business’s survival and success, irrespective of the size, scale and industry of the company. The vulnerability resulting from various types of internal and external crimes committed against the business is one prime risk that needs to be addressed with due precaution and precision. Even if a business is well protected with sufficient coverage offered by its commercial liability insurance policy, there are definite scopes of multiple crimes that are not part of that protection and the business will continue to be at risk. Here is a detailed analysis of why it is always recommendable for every business to have crime insurance coverage.

Risks that are not covered by your commercial liability insurance:

• Coverage against Employee Theft:
  If your business runs with employees handling cash and/or inventory directly, then it is at a risk of facing substantial damage by employee dishonesty. Corrupt employees may steal money, raw material, expensive equipment, sensitive customer data, important business documents and many such assets from inside or outside of the premises. If it goes on for a long time, think of the impact it will have on the business and its survival. These types of crimes may ruin the financial base of the business, permanently damage its market reputation, create havoc in its customer portfolio, and may ultimately stop the operations altogether. Unfortunately, it is not covered in a standard commercial liability policy.
• Coverage against Forgery or Alteration:
  It is a risk stemming from either an employee and/or a third party where the business may suffer deeply due to duplicate and/or modified company papers, checks, bills and orders and other types of important documents. With various highly sophisticated tools and technology easily available to a large sector of people, this kind of risk is not a remote possibility any more for a business today.
• Coverage against Robbery, Burglary and/or Damage to property:
  Irrespective of the type of products and services offered by the business, a robbery, burglary and/or damage to the commercial properties inside the premises may lead to a significant setback in the business’s continuous operation and/or sustenance.

Coverage against Cyber-crimes including Computer Fraud, Identity Theft and Fund Transfer Fraud etc.: 

In the modern world of ecommerce and online marketing, a business, however big or small, has to involve in a number of communication and transaction channels using the internet and a wide array of necessary software to stay ahead of their competition. Many business concepts are solely dependent on the internet too. Each of these threads makes the business more and more vulnerable to targeted and/or blanket attacks by cyber criminals all over the world. The risks include, but are not necessarily are limited to, fraudulent fund transfers, breach of online security by identity theft, loss of credit card data and other sensitive customer information. These events can be triggered from both inside and outside of the business office premises, but the impact would be equally devastating for itCoverage against Counterfeit:

This can happen if the employees accept and/or transact with counterfeit money while representing the company. Depending on the scale of exposure to the counterfeit currency, the business may suffer from various amounts of reimbursement claims and legal expenses from a number of different entities, including government authorities.

Coverage for non-material loss:

A business may suffer through indirect loss of irreplaceable non-material assets such as its customized software, records of financial transactions and other sensitive information as a result of a petty theft or burglary of its material assets like a laptop or a portable hard drive.

Each of the events described above is truly unfortunate but very much plausible in today’s world of crooked competitiveness. Even though the business may seem to be safe and secure with help from various internal controls and strategies, there will almost always be a flaw in the system or a more advanced technology might come up to invalidate the previously working security measures altogether. These mishaps can leave your business shaken and maybe even paralyzed for a long time if it is left unprotected and susceptible. It is always recommended to get in touch with a reliable and knowledgeable insurance consultant and have the necessary protections in place.

Take a look at the checklist below to ensure your crime insurance policy is designed to cover the basic needs:

• Your policy should cover incidents of minor thefts, burglary and/or robbery that occur within office premises.
  
  
• It should have provisions for handling fraudulent transactions with employees, contractors, vendors, suppliers and end users (customers) if applicable.
  
  
• It should include events like onsite and remote cyber-attacks on your IT resources that compromise the business’s funds, securities and/or other properties.
  
  
• It should offer protection against damage or destruction of the business’s commercial assets.
  
  
• Also, the contract should mention the indirect loss from damage to irreplaceable items and information as a covered event.

Limitations of crime insurance coverage:

However, there are certain factors that the crime insurance policies do not provide protection against. Below is a comprehensive list of such events for your ready reference:

• If there is proof of dishonesty and/or criminal acts executed by the insured. In most cases, the business owner(s) and/or the executives in the top management category are considered as the insured for this purpose.
  
  
• If the business property in question is under Government seizures or is destroyed under such authority.
  
  
• A crime insurance policy covers the expenses for the damages caused by the crime, but not the loss of the company’s income or the business interruptions that occur because of those damages.
  
  
• Also, it does not cover expenses for the indirect liabilities like losses incurred from lawsuits and/or other financial obligations of the business
  
  
• It does not cover the criminal acts of part-time employees working remotely for the company
  
  
• Also, it excludes the crimes committed by independent contractors such as a security guard or a contracted cleaning staff
  
  
• The policy does not extend protection against an employee with a previously known record of committing dishonest acts
  
  
• Accounting Errors
  
  
• Legal expenses
  
  
• War
  
  
• In many cases, insurers consider people of specific occupations excluded from the coverage such as: claims adjusters, attorneys, or people working in the financial industry