What is Crime Insurance?

In the complex web that is the world of business, protecting assets and minimizing risks are crucial to ensuring long-term success. It is a common misconception that general liability is a one size fits all policy. For corporations of all sizes, crime is a major risk. Large companies are seeing a deductible increase of 60%, which is indicative of rising crime claims. Because of this, crime insurance is a critical component of a comprehensive risk management strategy. So, what exactly is crime insurance, and why should businesses consider it?

Understanding Crime Insurance

Crime insurance is designed to protect businesses from crime-related financial losses. These acts can be committed by employees, third parties, or a combination of both. The coverage typically includes protection against theft, fraud, forgery, and other dishonest activities that can cause significant financial harm to a business.

Key components of crime insurance include:

• Employee Theft Covers losses from fraudulent or dishonest acts committed by employees. The scope of employee theft ranges from stealing cash or inventory to embezzlement.
• Forgery or Alteration Protects against losses from the forgery or alteration of checks, promissory notes, or other financial instruments. This coverage ensures that businesses are not left out of pocket due to forged signatures or manipulated documents.
• Fraud Crime insurance can cover various types of fraud, including social engineering scams, where fraudsters deceive employees into transferring funds or divulging sensitive information. It also includes protection against computer fraud, where cybercriminals hack into systems to steal funds.
• Funds Transfer Fraud This coverage protects against losses caused by fraudulent directives that result in the transfer of funds from the business’s accounts. Such fraud can arise from email scams or breaches in business communication channels.
• Burglary and Robbery Coverage extends to physical theft, such as burglary and robbery, where assets are stolen from the business premises or during transportation.
• Counterfeit Money Some crime insurance policies also include protection against counterfeit currency, which can be a significant risk for businesses handling large amounts of cash.

Why Crime Insurance is Essential

• Financial Protection The biggest benefit of crime insurance is financial protection. Criminal acts can result in substantial financial losses, and without proper coverage, these losses could severely impact a business's bottom line.
• Peace of Mind Knowing a business is protected against criminal acts provides peace of mind. Business owners can focus on growing their operations instead of the worry of crime-related losses. 
• Employee Dishonesty While businesses strive to hire trustworthy employees, the reality is that internal theft and fraud do occur. Crime insurance provides a safety net against the financial repercussions of dishonest employees.
• Complementing Other Policies Crime insurance complements other types of insurance, such as cyber and property insurance, by covering specific risks that may not be included in those policies. This ensures a more comprehensive risk management strategy.
• Safeguarding Reputation Financial losses from criminal acts can damage a business's reputation, particularly if customer or client funds are involved. Crime insurance helps mitigate these risks and maintain trust with stakeholders.

Choosing the Right Crime Insurance Policy

When selecting a crime insurance policy, it’s essential to consider the specific needs of your business. Here are some steps to guide you:

• Assess Risks Identify the crime risks your client's business faces. Consider factors such as the nature of their operations, the size of their workforce, and the value of assets.
• Coverage Limits Ensure that the policy offers adequate coverage limits. This means evaluating the potential maximum loss a business could incur from a single incident and ensuring the policy can cover that amount.
• Policy Exclusions Be aware of any exclusions in the policy. Understanding what is not covered is as important as knowing what is covered.
• Claims Process Familiarize your client with the claims process. A straightforward and efficient claims process can make a significant difference when dealing with the aftermath of a criminal act.
• Reputable Insurer Choose an insurer with a good reputation and experience in providing crime insurance. A reliable insurer can offer better support and guidance in managing risks.

Preparing for the Possibilities Together

Crime insurance is an essential component of a comprehensive risk management strategy for businesses. It provides critical financial protection against criminal acts, from employee theft to sophisticated fraud schemes. By understanding the key components of crime insurance and carefully selecting the right policy, businesses can safeguard their assets, maintain financial stability, and focus on growth and success.

Partnering with Flow Specialty provides access to a broad range of admitted and non-admitted markets across key states. We offer flexible primary and excess coverage options tailored to unique needs. Our rapid quoting capabilities and extensive market reach ensure a smooth and efficient coverage process. You’ll get client-ready proposals and expert guidance to enhance clarity and confidence in managing liability risks. With Flow’s AI-powered tools and streamlined automation, policy procurement is simplified, while personalized support ensures effective liability management and high client satisfaction.