Crime Insurance

What is Crime Insurance? 

Commercial Crime insurance also commonly referred to as Fidelity Insurance provides coverage for the perils of theft such as robbery, burglary, computer fraud, wire transfer fraud, counterfeiting, forgery or alteration and coverage while outside of the premises. 

Coverage can also include Theft of Client’s Property, a third-party coverage that protects your clients from theft while your employees are on their premises. 

Who does Crime Insurance cover?

Coverage is designed to protect business owners and their clients from theft related claims by employees. Private, Public, and Non-Profit Organizations are all eligible for coverage.   

How is coverage written? 

Coverage can be written on a first, third, or combined first and third-party basis. Third party can be written to be even more specific to include coverage for all of your clients on a “blanket basis” or just covering one specific client or contract.

  • First Party Crime Insurance - protects the business owner from theft by his or her own employees such as embezzlement. Has several other additional insuring agreements that can be added on such as wire and transfer fraud, forgery or alterations, and robbery or burglary coverage.
  • Third Party Crime Insurance - protects the clients of the business from theft by employees while the employees are on the client’s premises. Can be written on a blanket or contract basis. This is common coverage for janitorial companies, IT Services, contractors and anyone who will be on their client’s premises. The sole insuring agreement is Theft of Client’s Property. 

What limits are crime insurance quoted at?

Coverage limits can vary and depends on the size of your business, contracts in place, amount of funds being handled by employees, etc. If a contract is requesting you to obtain crime insurance, it is always a good idea to request either a copy of the contract or a copy of the insurance requirements to be sure it is properly quoted. Typically limits can range anywhere from $5,000 up to $5,000,000. Sometimes higher depending on the contract or limit needed. 

Example Claim Scenarios: 

The head of accounting at a food processing center approved payments to several fictious vendors set up by the accountant with names similar to vendors the company already contracted with. An accounting clerk discovered the name similarities and it was discovered the accountant had already approved false invoices totaling more than $850,000. 

An accountant at a large firm manipulated the payroll system to authorize himself over $300,000 in unauthorized bonuses and commissions over a 4 year period. 

A foreman of a construction company is given a company credit card to purchase materials needed for an upcoming job. The foreman purchases the materials, but also purchases items for a remodel he is doing at his own house. After an audit, the owner of the company realized the amount of the purchases did not add up to the amount of materials being bought. The employee was fired and arrested. The loss totaled more than $100,000