Commercial property loss occurs more often because of crime-related incidents than any other cause. Employee theft is one of the largest vulnerabilities of commercial crime, but it’s not the only crime-related exposure that a small business faces. Forgery, alteration, non-employee robbery or theft of money or securities, money order fraud, counterfeit paper currency fraud, and computer fraud are all other crime-connected risks that puts your business at an increased exposure for loss.
Small businesses can protect themselves against such exposures by obtaining commercial crime insurance. Commercial crime insurance can be written as a stand-alone policy or it can be written into your commercial package insurance policy. Either way, it protects an organization against a potentially devastating crime-related loss that could have a detrimental impact to their bottom line. Stand alone insurance allows you to customize coverage to meet particular needs of your business. On the other hand, commercial crime insurance written as part of your commercial insurance package can be easier administratively, since there is one policy, one bill, and one underwriter.
The very nature of the types of acts covered by business crime insurance often means that the deception is hidden for quite some time. For instance, the dishonest employee who is stealing company products or funds may be taking steps to hide his dishonestly. The result: losses can remain hidden for months, or even years, which could amount to significant losses as they accumulate.
Commercial crime coverage is available in two basic forms: discovery form and loss sustained form.
- Discovery Form. Here, losses discovered or identified during the policy period are covered, even if they occurred before the policy period.
- Loss Sustained Form. This policy provides coverage for a loss that occurred during the time frame that the policy was in force when the loss occurred. Typically, the coverage extends up to twelve months after the policy’s expiration date. Keep in mind, that the loss sustained form coverage can put you at risk if a financial loss of a commercial crime isn’t discovered for years later.
Just about every small business needs commercial crime insurance at a bare minimum to protect against employee theft. With employee crime on the rise, it more important than ever to protect your organization from a hapless and catastrophic loss.