While you may think your business would never be the victim of theft, the harsh reality is that nearly every business can become a victim. These days, thieves (including your employees) do not need direct access to cash to steal from you—merchandise, supplies and securities are all fair game.
While standard commercial insurance policies may provide some protection from criminal acts, they often do not cover losses resulting from fraudulent activities. In fact, the Association of Certified Fraud Examiners estimates that a business can expect to lose five percent of its revenue to fraud each year. Commercial crime insurance can provide protection from losses following a business related crime.
What is Crime Insurance?
Crime Insurance was developed to deal with the limitations of other policies and extend protection to include coverage for a wide variety of wrongdoing. Covered events typically include burglary, forgery, fraud, extortion, employee dishonesty, and the theft, destruction or damage of money, security or other property.
What are the benefits of Crime Insurance?
- Coverage for the misuse of funds. It is likely that a number of your employees have access to company funds or financial information. In some cases, employees may abuse this access for personal gain. Crime insurance can protect organizations from the misuse or illegal transfer of funds, ensuring your finances are safe from internal criminal acts.
- Extortion safeguards. While it can be difficult to imagine, employees and outside actors can extort a company for funds by holding a director or officer hostage or through other illegal methods. Without crime insurance, your organization would have no means to recoup these losses, which could devastate your bottom line.
- Reimbursement for computer fraud. Computers and emerging technologies have made it easier than ever for employees to carry out crimes against their employers. Crime insurance can provide a crucial layer of protection for any money or securities lost via computer fraud, which is an important piece to an effective cyber risk management program.
- Insurance for goods in transit. Goods in transit are particularly vulnerable to employee theft and, in some cases, organizations may not notice anything has been stolen until it is too late. What’s more, if the theft takes place outside of the organization’s premises, it can difficult to prove, often leading to drawn out and expensive legal battles. Crime insurance policies can provide ample protection for goods in transit and reduce the likelihood of extreme losses whenever you send or receive products.
- Coverage for forgery and alteration. In some cases, your employees have access to checks that they can easily alter for their own gain. Effective crime insurance policies provide coverage for losses that result from the forgery or alteration of a check.
Even if your organization takes the necessary precautions, you could still end up the victim of employee fraud and similar crimes. To discuss your unique risks and to learn more about crime insurance policies, contact DiNicola Insurance Services today.