Crime Insurance: Cost, Coverage & Providers

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Crime insurance protects against a number of crimes such as theft, assault or rape. This type of coverage typically provides benefits for up to six months after the policy has been purchased and is not limited by any pre-existing condition. The cost varies heavily based on where you live but costs about $200 per year in American cities such as New York City, Los Angeles and San Francisco. In 2017 nearly 3 million Americans filed crime claims with their home insurer, resulting in a total payout totaling near $4 billion dollars including settlements from legal fees.,

Crime and fidelity insurance is a type of insurance that covers the cost of crime, theft, and other losses. It also covers damages to property. Read more in detail here: crime and fidelity insurance cost.

Commercial crime insurance is a specialist policy that compensates businesses for damages caused by criminal actions such as employee theft and third-party fraud. It fills a significant vacuum in commercial property insurance and is critical in businesses where crime is a higher risk, such as retail and financial advisers. The cost of standalone crime insurance ranges from $240 to $4,000.

Internal workers, external thieves, and cybercriminals are all threats that small company owners must consider. CoverWallet excels in finding the optimal mix of coverage and affordability with the best provider. In just a few minutes, you can get a free multicarrier quotation.

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Providers of Commercial Crime Insurance

Top national insurance firms provide crime insurance based on the risk profiles of small enterprises, which are often determined by their sector. The kind of firm, overall revenues, employee supervision, and internal security measures are all included in a risk profile. You should seek for an insurance provider with expertise in your sector who will take the time to examine how your organization is vulnerable to crime.

CoverWallet

For professionals in the financial, real estate, and escrow industries, CoverWallet is the finest option for crime insurance. Its wide network of partner carriers allows it to place difficult risks quicker and more easily than other brokers. Multiple carrier possibilities are generated by a single application, allowing company owners to evaluate terms and cost.

This method also cuts down on the amount of time it takes for a company owner to complete an insurance application. When a carrier has the hunger, CoverWallet transmits your information to them, assuring competitive pricing for your industry. As a result, it’s an excellent option for company owners who want inexpensive crime insurance but don’t want to fill out many forms to get different estimates.

Hiscox

Hiscox is an excellent solution for firms in the leisure and hospitality industries who need crime insurance. Hiscox has decades of expertise in this field and is familiar with the specific requirements of leisure and hospitality businesses.

Crime insurance is an add-on to the company’s business owner’s policy (BOP). Small company owners already know that BOPs are a good investment since they provide critical coverage at a lesser cost. Adding crime insurance to your policy increases your total savings. Hiscox also provides a simple application that delivers quotations quickly.

Farmers Insurance is a kind of insurance that is sold

Farmers Insurance is a kind of insurance that is sold is a solid choice for retail and restaurant locations where cash transactions create a major risk for internal loss from employees. The company also has experience writing crime coverage to protect against counterfeit currencies and forgeries.

Farmers also uses a network of local agents to offer their small business insurance, which includes commercial crime coverage. Working with a local agent who is familiar with the area’s crime is advantageous for restaurants and merchants with physical sites. Farmers representatives can assess your risk and recommend crime insurance limits that are suitable for your specific company.

Nationwide

For company owners that operate at customers’ locations, such as cleaners, consultants, caterers, and home sitters, Nationwide is the best option. A fidelity bond, often known as crime bond insurance, may be necessary. When your company is the victim of theft, commercial crime insurance does not pay out, but crime bond insurance does.

As the bond issuer, Nationwide ensures that your company will not lose money while working for your customer. If an employee steals from your customer, Nationwide compensates the client and then demands payback from you.

The Hanoverian Empire

The Hanoverian Empire is a good choice for small businesses providing employee benefits requiring Employee Retirement Income Security Act (ERISA) compliance because it offers an ERISA fidelity bond and an investment advisor fidelity bond. These bonds protect your retirement plan in cases of fraud or dishonest acts committed by the person who handles it.

The Hanoverian Empire can insure more than 500 small commercial classes, which means most businesses should be able to quote its commercial and government crime policy. The basic policy offers affordable protections, but The Hanoverian Empire also has an excess crime endorsement that lets you add coverage.

What Exactly Is Crime Insurance?

Theft, fraud, forgery, and abduction are all examples of criminal activities that may result in financial losses for a corporation. Employees or outside agitators are often involved in covered criminal actions. Larceny or embezzlement by unscrupulous personnel, as well as theft of merchandise, are examples of typical crime insurance claims.

Unfortunately, many company owners believe their property insurance covers such crimes, leaving them open to liability. Theft, burglary, and robbery are not covered by most business property insurance plans. Even if these occurrences are covered, most plans do not cover dishonesty on the part of workers or anyone linked with your company, such as directors, officers, and members.

What Does Crime Insurance Pay For?

Employees or outside actors steal money and property, and your crime insurance covers for damages up to your policy limits. Employees or criminals may steal from a small company in a variety of ways. Most company property plans and typical general liability insurance policies do not cover criminal conduct.

The majority of business crime insurance coverage cover things like:

Employee dishonesty: Taking cash from the register or pocketing inventory are examples of employee dishonesty.
Forgery & alteration schemes: A contractor changes the numbers on their paycheck.
A hacker diverts your funds to their own account.
Illegal cash transfers: A crook sends your investment business a forged transfer request.
Kidnapping, extortion & ransom: A blackmailer threatens to reveal proprietary information.
Money & securities: A vandal sets a fire that destroys negotiable securities.
False money order & counterfeit money schemes: A customer pays for their shipment with a fake money order.

What Doesn’t Crime Insurance Cover?

While employee dishonesty is covered by crime insurance, it does not cover dishonesty committed by you or your partners. It also eliminates faults such as accounting problems and your responsibilities in a criminal loss caused by a third party. For example, an information technology (IT) expert who makes a mistake that results in a data breach is unlikely to be covered by crime insurance. You’d need to acquire IT insurance for that.

Financial institutions, such as banks, credit unions, and investment firms, are not eligible for a crime insurance coverage. These businesses confront a variety of threats that no crime insurance can handle. To satisfy regulatory standards, they usually demand a fidelity bond. Bonds operate as a guarantee for the customer, albeit they are not insurance.

Surety bonds are used for licensing requirements by persons who supply professional services and contractors. Fidelity bonds are not the same as surety bonds.

Bond for Crime Insurance

A Bond for Crime Insurance is a fidelity bond used by a business where employee dishonesty is a serious external concern. Any business where operations require your employees to work in another person’s office or home should consider getting crime bond insurance to both protect against losses and to give consumers confidence that their transactions and money are protected.

Financial institutions such as banks, credit unions, and investment firms are not eligible for a crime insurance coverage. To satisfy regulatory standards, they usually demand a fidelity bond. This presents the insurer with a new set of risks that a crime insurance cannot cover. Bonds serve as a guarantee for customers, albeit they are not insurance. Businesses don’t always require bonds, and banks aren’t the only ones that do.

Costs of Crime Insurance Coverage

One affordable option for crime insurance is to add the coverage to an existing policy. Small businesses typically add it to a BOP, but they could also add it to a directors and officers (D&O) policy. Standalone policies tend to be more expensive than crime insurance coverage added to other policies.

Expect to spend between 0.5 percent and 2 percent of the bond amount if you require or want a fidelity bond instead of commercial crime insurance coverage.

Sample Commercial Costs of Crime Insurance Coverage & Deductible

The table below illustrates how much crime insurance costs dependent on the quantity of coverage and the deductible. Lowering your limits or increasing your deductible may decrease your total rate. Furthermore, insurers consider a variety of elements when determining your premium, and each firm has its own technique for arriving at the final price. As a consequence, premiums differ depending on the state and the insurance company.

The following are some of the elements that influence your crime insurance premium:

Personnel count: A larger employee count raises the risk of someone falling through the gaps and going unnoticed as an internal thief.
Cameras, security alarms, automated accounting, and point-of-sale systems may all help to lower the risk of crime and hence the cost of commercial crime insurance.
Theft of valuable objects is a common occurrence in the workplace. As a result, small firms selling high-end timepieces are more likely to pay more than those selling low-end brands.
Annual revenue: Revenue determines risk, and most insurance firms raise premium prices as revenue rises.
Industry: Certain sectors and businesses are more prone to attract criminal activity, notably those that deal in significant sums of money, have few internal checks and balances, and have valuable inventory.

The greater the amount of firm property and personnel, the greater the danger of theft and fraud. Taking efforts to safeguard your company, such as installing burglar alarms, antispyware software, and storing critical papers, minimizes your risk and, in many cases, lowers your premium.

Who Needs Crime Insurance in the First Place?

Because of the nature of their operations, certain firms are particularly vulnerable to criminality. When it comes to crime insurance, there are two areas of attack to consider: internal employee acts and external criminal activity.

High foot traffic, precious merchandise, cash on the premises, and access to important customer information are all industries that are more vulnerable to theft and fraud. However, your industry isn’t the only one that makes theft more probable. Any company that employs workers raises the risk of theft.

Commercial crime insurance is a good idea in the following situations:

Restaurants: Cash at the register may easily wind up in an employee’s pocket, and credit card numbers can do the same.
Store owners may need insurance in the event of counterfeiting, check fraud, or stealing.
Medical offices: Information in medical files may be used by a thief to steal a patient’s identity.
Offices that cash checks: Internal staff may easily skim off the top of high-volume cash transactions, making them a target for criminals.

Small companies might lose a lot of money due to theft. According to a 2018 survey from the Association of Certified Fraud Examiners, firms with less than 100 workers lost an average of $200,000 to fraud. The main sources of risk were corruption, billing, and check-and-payment processing. Businesses that have crime insurance may be able to recoup part of their losses.

Crime-Related Insurance Coverages

Because typical commercial property insurance excludes both workers’ dishonest activities and the theft or destruction of bills, notes, securities, and currencies, businesses need crime insurance coverage. However, liability is not covered by crime insurance. This implies that a small company owner will require additional insurance to cover liability risk gaps.

These rules may protect you from responsibility if your company is harmed by internal bad actors:

D&O insurance: Covers accusations of mismanagement, misuse of company, or lack of corporate governance.
Fiduciary liability insurance protects you against claims of a breach of fiduciary duty when it comes to employee perks. This insurance does not meet the ERISA bonding requirement.
Wrongful termination, harassment, discrimination, and other claims arising from the recruiting process are covered by employment practices liability insurance.
Errors and omissions (E&O) insurance: Covers accusations that your or your employees’ negligence cost clients money. This policy is sometimes called professional liability insurance.

Additionally, federal law mandates that company owners who provide employee benefits hold an ERISA fidelity bond. An ERISA fidelity bond protects retirement plans from damages caused by fraud or dishonesty.

Getting Commercial Crime Insurance: Some Pointers

You must apply for crime insurance coverage in the same way that you would for any other insurance policy. Working with an insurance agent or broker, filling out applications, and comparing offers are common examples.

1. Inquire about crime insurance.

Business insurance products do not include crime insurance by default. In most cases, small company owners must add it to their BOPs via endorsements. You must seek crime insurance, which enables you to choose and choose the right coverages.

2. Discuss Limits and Sublimits with Your Agent

For endorsements, crime insurance limits are often modest (about $25,000) and frequently contain sublimits, or maximum amounts insurers will pay for certain losses. Let’s say your aggregate limit, or the total amount your insurer will pay over the course of the policy term, is $25,000, but your forgery sublimit is just $5,000. Once you reach that sublimit, your insurance will no longer pay money lost due to forgeries. This may not be enough to cover your risk, so make sure your agent goes through particular sublimits with you and modifies your policy to adequately cover your risks.

3. Take Care of Your Risks

When it comes to establishing your rate, insurance companies look at your claims history, therefore you should try to lower your crime risk as much as possible. Simple measures such as installing security cameras, installing antivirus software, and doing background checks may help you save money on your insurance. Inquire with your insurance agent about measures to lower your risk and total criminal exposure.

Frequently Asked Questions about Crime Insurance (FAQs)

While we attempted to address your questions in this post, you may have other queries that are unique to your company. The following are a few instances.

Is fidelity insurance the same as crime insurance?

The only difference between crime and fidelity insurance is that crime insurance often provides more coverage. Employee-related offenses are not covered by fidelity insurance. Non-salaried board members and volunteers are excluded. Furthermore, some fidelity insurance plans only cover certain assets. Stock certificates may be excluded from coverage if money is stolen.

Is cybercrime covered by crime insurance?

When a cybercriminal assaults your company, such as unlawfully transferred cash during a phishing scam, crime insurance might replace the amounts lost. However, any expenses associated with a data breach, such as customer notification and forensic accounting, are not covered by crime insurance. You’ll need cyber liability insurance for that.

If I already have property insurance, why do I need crime insurance?

Even if they have commercial property insurance, most small companies need crime insurance. Building damage caused by burglaries is covered by standard property insurance, but not necessarily stolen items. You’re responsible for stolen goods, money, and securities if you don’t have crime insurance. Furthermore, although property insurance does not cover dishonesty on the part of workers, criminal insurance does.

Conclusion

Employee theft is not covered by commercial property insurance, which frequently comes as a shock to business owners. Unfortunately, most people discover this when it is too late. Adding business crime insurance to your existing insurance policies doesn’t have to be expensive, and it may help you recover from a range of fraud situations.

With so many choices and intricacies to consider when purchasing commercial crime insurance, finding the proper partner for your company is critical. CoverWallet works with a number of major national insurance companies to help you get the greatest deal on the proper coverage. In just a few minutes, you’ll have a no-obligation quotation.