You would agree that theft is one of the most severe crimes in the USA. In business, theft is one of the leading causes of persistent losses.
Several times, this theft has been traced to employee misappropriation or mistake. Consistent practice of this crime may lead to either a serious loss or winding up.
This article discusses the insurance policy that covers such loss. It also gives insight into everything you need to know about commercial crime insurance!
What Is Commercial Crime?
Commercial crime insurance is a type of insurance designed to cover the loss that an organization suffers from commercially.
This kind of insurance may include damage to or destruction of a property used for business as a result of criminal activities.
Usually, the loss should arise from man-made events such as employee theft and embezzlement. It is also important to note that you cannot file for indemnity if your property was damaged randomly.
Commercial crime insurance is relevant to any business. It covers you in the event of fraud, theft, and other issues. It is also important to note that Commercial Crime insurance does not cover financial institutions.
This is because financial institutions have their coverage already set out for them. The Central Bank offers bonds that guide financial institutions against criminal activities.
Consistent crime can ruin your business. This is the reason you should adopt commercial crime insurance. Not only does it protect you, it decreases the rate of bad debt in your organization.
Commercial Crime Insurance Cost
The importance of commercial crime insurance can not be overestimated. However, the cost of commercial crime insurance depends on many factors.
Some of these factors may include your company size, company revenue, and the cost of some office items. Regardless of this, the insurance premium of commercial crime insurance ranges from $500 to $5,000 yearly.
Types Of Commercial Crime Insurance In the USA
Here are the types of commercial crime insurance:
• Employee Theft
As a business owner, you are dealing with different people in your organization. Some of which you do not know their background.
This kind of policy helps you guard against employee dishonesty. It also guards against theft and embezzlement that may arise in the course of business.
Employee Theft policy guards against all kinds of employees, be it full-time, part-time, or contact staff. It is worthy of note that this kind of policy does not necessarily cover executive staff in an organization.
• Money and Security
This kind of policy only applies to non employee theft. Unlike the employee theft policy, it covers the loss of revenue from destruction or disappearance. The policy usually is divided into two:
– Inside: This kind of policy includes security, asset, or cash located within the premises.
– Outside: This kind of policy includes security, assets, or cash located outside the business premises.
As a business owner, you have to choose which one you are interested in. You have to carefully observe at what point of the business you experience commercial crime. This is to ensure you pick the right kind of policy.
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• Money Order and Counterfeit Money
Sometimes it is not always easy to detect counterfeit money. The advent of high-end technologies has made the process of detection hard to figure out. Thanks to this policy, you can accept indemnity if you erroneously obtain counterfeit money.
• Funds Transfer Fraud
Funds transferred fraud is one of the crimes covered by this policy. This simply applies to transactions that appear to be sent by you but were falsely forged by someone else.
As a result, the bank would send the money to the person. This is usually done without the consent of the person involved.
READ THIS: Financial Crimes Enforcement Network
Commercial Crime Policy Exclusion
Here are some examples of commercial crime policy exclusion:
• Employees With Prior Criminal Records
This policy would not cover a deliberate hire of a former convicted criminal. If you hire one and he commits a crime, this policy would not cover such.
• Commercial Crime By Senior Management
As stated in this article, commercial crime only covers employee dishonesty. It does not cover the executive’s misappropriation or embezzlement. Therefore, it does not cover crimes perpetrated by preference shareholders, business partners, or owners.
• Financial Losses
Financial loss that cannot be traced would not be covered by this policy. Losses such as legal fees and loss of income would be attributed as an indirect loss.
• Information Breach
If there is a breach in your company because of an employee’s proficiency, this policy would not cover such. You would need to apply for another kind of policy that covers such.
Conclusion
Purchasing this policy would greatly reduce the risk of insurance crime in your organization. In addition, it would also reduce the risk of losses arising from theft. Thanks for reading.