Business & Commercial

Crime insurance: the theft your other policies leave out.

Most owners assume their business policy covers theft. It usually covers a burglar taking your equipment. It usually does not cover your own bookkeeper, a forged check, or a fake invoice that someone on your team paid in good faith.

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What crime coverage is

Commercial crime insurance covers money, securities, and other property your business loses to dishonest or fraudulent acts. It is usually its own policy, or an endorsement added to another one, and it exists because general liability and commercial property were never designed for this. General liability responds to claims other people make against you. Property mainly responds to physical damage and theft by outsiders.

You will also hear this called fidelity coverage. A fidelity bond is generally employee-dishonesty protection for the business, which is close to what a crime policy provides. That is a different thing from a surety bond, which is a guarantee that protects the party requiring it.

The common pieces

  • Employee theft. An employee takes money, inventory, or other property.
  • Forgery or alteration. Someone forges or changes a check or similar document.
  • Money and securities. Loss of cash or checks, on or off your premises, depending on the form.
  • Computer fraud and funds transfer fraud. A third party gets into your systems or banking and moves money.
  • Impersonation fraud. An employee is tricked into sending money by someone posing as a vendor, a customer, or an executive. This is often covered at a much lower limit than the rest.

Where crime and cyber overlap

A wire fraud scam can land in a gray area. Part of it may be addressed by a crime policy, part by a cyber policy, with different limits and different conditions on each, and sometimes neither pays. If you carry both, ask which one responds to which kind of loss, and whether either expects you to verify payment changes by calling back a known number.

The conditions that decide a claim

  • When the loss counts. Many crime policies pay for losses discovered during the policy period, with a limited window after cancellation to discover them.
  • Who counts as an employee. Check how temps, volunteers, and contractors are treated.
  • Proof. Some forms exclude losses that can only be shown by an inventory shortage, with no way to tie them to a specific act.
  • Controls. Some policies expect procedures such as dual approval on payments, and may reduce or deny a claim if they were not followed.
  • Whose money. If you hold client funds, ask whether third-party or client property is covered.

Trust is how most small businesses run. Crime coverage is what stands behind it when that trust is misplaced.

Who should ask

Any business that handles cash, checks, or payments, has employees with access to funds or inventory, pays vendors by wire or ACH, or holds money that belongs to someone else. That includes property managers, accountants, nonprofits, and condominium and resident associations that handle owners' funds. If one person can move meaningful money without a second set of eyes, it is worth a conversation.

How I work

I look at how money actually moves through your business and who can touch it, then compare that against what your current policies cover. You see the gap before an event shows it to you. I place coverage with multiple carriers, and availability and terms depend on the carrier and its underwriting.

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Frequently asked questions

Doesn't my business insurance already cover employee theft?

Usually not. General liability covers claims by other people against you, and commercial property mainly covers physical damage and theft by outsiders. Employee dishonesty, forgery, and fraud losses are typically covered by a separate crime policy or endorsement. Check your policy to see whether you have one.

Is crime insurance the same as a fidelity bond?

The terms are used loosely. A fidelity bond is generally employee-dishonesty coverage that protects the business, which is close to what a crime policy provides. A surety bond is different: it is a three-party guarantee that protects the party requiring it. The Bonds page explains the surety side.

Does it cover someone tricking an employee into sending money?

Sometimes. Impersonation or social engineering fraud, such as a fake vendor invoice or a message posing as an executive, may be covered under a crime policy, a cyber policy, or neither. It is often subject to a lower sublimit and to conditions such as a verification procedure. Ask which policy responds and what conditions apply.

How much crime coverage do I need?

There is no standard number. Start with how much money one person can move or access, how much cash and inventory you hold, and the size of your largest payment. Internal controls such as dual approval also matter, and some policies expect them. A coverage review is how to size it.

Does crime insurance cover a burglary of my office?

Theft of equipment and inventory by an outsider is usually handled under commercial property. Crime coverage focuses on money, securities, and dishonest or fraudulent acts. Where one ends and the other begins depends on the forms, so ask how a specific loss would be treated.