Crime Insurance: Cost, Coverage & Providers

Commercial crime insurance is an insurance policy for losses to your business because of criminal acts, such as employee theft or third-party fraud. Commercial crime coverage can be bundled with an existing commercial property policy or purchased as a stand-alone policy. Stand-alone crime insurance costs between $650 and $2,500 yearly.

Key takeaways

• Crime insurance primarily protects businesses from employee theft.
• Over time, other protections have been put into place, such as investigative costs, computer fraud, and funds transfer, or even theft of client property off-site.
• Crime insurance can be purchased on its own or bundled with other coverage.
• An Employee Retirement Income Security Act (ERISA) bond is an example of crime insurance.

Getting crime insurance online quickly can be challenging. However, dedicated small business insurer Hiscox makes it easy. In minutes, you can get a quote and purchase a policy online for crime insurance.

Crime Insurance Coverage & How It Works

Small businesses are the most likely to suffer from occupational fraud, which represents an average loss of 5% yearly. This is why commercial crime insurance is so important for business owners to consider. That 5% translates to approximately $150,000 in median losses each year.

Crime insurance is a policy you should consider to protect your business from financial losses resulting from criminal activity. Most commercial property insurance policies, if they have theft coverage, do not cover employee-related theft or theft of your items when they are in transit. But crime insurance, which can be purchased as a stand-alone policy or added to an existing business owner’s policy (BOP), does provide this crucial coverage.

Crime Insurance Claim Examples

Typically, crime insurance has two areas of coverage. First-party coverage is for a loss to your business from criminal activity while third-party coverage protects your business from another business or entity claiming that your business carried out a criminal act.

Examples of a covered loss include:

• Employee dishonesty: The most common type of crime insurance loss involves a dishonest act by an employee, such as taking cash from the register.
• Forgery: An employee forges a manager’s signature on a check for themselves.
• Illegal funds transfer: An employee creates a false vendor and transfers funds to a bank account associated with the fictitious business.
• Kidnapping, extortion, and ransom: A blackmailer threatens to reveal proprietary information.

False money order or counterfeit schemes: A customer pays for an order with counterfeit money.

What Crime Insurance Doesn’t Cover

Like any insurance policy, commercial crime insurance doesn’t cover every crime-related loss your business may suffer. These gaps in coverage are called exclusions on your policy.

Some common exclusions are:

• Executive crime: Criminal acts by an executive are usually not covered.
• Coordinated acts: Criminal acts by business partners in coordination with an employee are not covered.
• Cybercrime:Cyber liability insurance is stand-alone insurance.
• Wrongful termination: An employee claiming wrongful termination and other discriminatory acts are covered by employment practices liability insurance (EPLI).
• Multiple offenses: Typically, the first theft by an employee is covered, but if the employee develops a history of stealing from your business, then the policy will most likely stop providing coverage.

Commercial Crime Insurance Costs

Because of the nature of this insurance, obtaining a commercial crime insurance policy will usually be more involved than getting, say, general liability insurance. It is not uncommon for this type of insurance to require working with an agent.

When providing a quote for commercial crime insurance, insurers consider many factors, including who handles the money, the number of employees, history of theft with current employees, and the line of business.