Crime is a constant threat. Are you taking steps to protect your company?
Crime takes many forms and may come from within your organization or from outside. Regardless of the origin, it can have a big impact on your bottom line. Commercial crime insurance provides protection against many types of crime. With this coverage in place, businesses of all sizes can shift their focus to growing their revenue.
Crime Risks for Public Companies
Growing businesses may attract the attention of bad actors. While you want to trust your team, there’s a risk that someone will turn out to be dishonest. People outside of your company may also target you. When your company is the victim of a crime, you may suffer from disrupted operations and a tarnished reputation. Small companies may have a particularly hard time recovering from criminal incidents.
Crime risks include:
- Theft
- Forgery
- Social engineering
- Wire transfer fraud
- Employee dishonesty
- Employee theft
- Embezzlement
- Computer fraud
How the Commercial Crime Coverage Can Help Protect Your Business
Even if you run background checks on your employees and take security seriously, crime is a risk. Crime insurance will help your company recover from criminal activity targeting your business.
With commercial crime insurance, you:
- Protect your company’s reputation. When employees commit crimes, the impact on a company’s reputation is often significant. Crime insurance helps you recover quickly to put the negative experience behind you.
- Preserve business relationships. Crime that impacts your bottom line could also affect your vendors, clients, and partners. Crime insurance will help you maintain your business relationships and earn trust.
- Give investors peace of mind. After a major loss, investors may hold directors and officers responsible for failing to prevent the crime, which could lead to lawsuits. With sufficient insurance in place, you lessen the impact of the crime – and therefore the risk of litigation.
Key Crime Policy Features
Commercial crime insurance policies vary, but they may offer:
- Broad coverage for employee and non-employee crimes. See your policy for the covered perils.
- High limits. Since a single instance of social engineering or theft may be substantial, having high per-occurrence limits is critical.
- First- and third-party coverage. First-party coverage protects your company’s assets, while third-party coverage protects your clients. Depending on the type of business, you may need both.
Frequently Asked Questions
Does cyber or crime insurance cover business email compromise losses?
Either cyber or crime insurance may cover business email compromise losses, depending on the details of your policies. However, some policies exclude this type of loss. The limits, including the applicable sublimit, also vary between policies.
What doesn’t crime insurance cover?
Crime insurance policies vary significantly. For example, some offer coverage for social engineering crimes, while others don’t. Cyber insurance covers certain cyber losses, such as data breaches and malware, but crime insurance does not. See your policies to determine which types of crimes it covers as well as any other exclusions.
Regardless of the types of crimes a policy covers, certain exclusions are common. For example, crime insurance typically covers employee crime, but it may not cover crimes committed by employees with a known criminal record. It may also exclude crimes committed by business owners.
What are the reporting requirements for crime insurance?
You should report a crime to the insurer as soon as you discover it. Your policy may require notification within a certain period of time, such as 30 days after you discover the loss. Failure to notify the insurer in a timely manner could jeopardize your coverage.
In many cases, the business does not discover crimes immediately. For example, if an employee is embezzling from your company, you may not uncover the crime for months or even years. Good accounting, inventory, and security practices will help you detect crimes as early as possible. Once you discover that a crime has occurred, notify your insurer.
Does crime insurance matter for microcaps?
Yes, crime insurance provides valuable protection. For retail businesses, theft is a constant threat and may cut into profits. Even if you don’t have inventory or cash on hand, some types of crime are a threat. For example, employees could embezzle funds or non-employees could commit fraud. A crime policy tailored to the types of crime your business is exposed to offers important coverage for your business and brings peace of mind to your stakeholders.
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