Crime insurance is a broad term that applies to insurance coverage that protects a business or organization from damages or a loss of property due to a crime. This often includes losses that are incurred due to the theft of physical property, as well as the theft of intellectual property (such as an employee securing and selling the client list of an employer to a competitor). In order to file a claim, the crime must be covered in the terms of the insurance contract.
Many businesses have some type of crime insurance, either through their Business Owners Policy or separately. A small business can obtain commercial crime insurance to provide protection from situations such as an employee choosing to steal company funds. The scope of crime insurance coverage will vary depending on the level and type of coverage desired. While just about every crime policy will cover situations where the theft of furnishings, computer equipment or machinery necessary to the function of the business takes place, it is often necessary to request coverage for the theft of intellectual property, as well as covering what’s called “social engineering”. Social Engineering is essentially when person persuades a business owner or one of their employees to send information somewhere through some type of online fishing scam.
While a small business may not see the need for anything other than protection in the event of theft of office equipment, it is often a good idea to at least consider what intellectual property could be stolen and cause damage to the company. For example, the small business owner should consider what damage could result from the theft of the company’s client list, accounting software files, and other information related to the internal functioning of the business. This coverage can also be written to protect your business from the theft of your client property, trademarks, accounting information or monies in your care, custody and control. Business crime coverage protects you against losses by things like employee dishonesty, theft of monies, check forgery, embezzlement and destruction records.