What is commercial crime insurance?

Commercial crime insurance protects a business from financial losses caused by theft, fraud, and dishonesty, whether the wrongdoer is an employee, an outside criminal, or a scammer who manipulates someone into transferring money. It covers losses of money, securities, and property that result from criminal acts. Standard commercial property policies generally exclude these losses, which leaves a gap that surprises many business owners after a claim.

What crimes does a commercial crime policy cover?

Property insurance responds to some theft situations, such as burglary through forced entry or robbery at gunpoint. It does not cover an employee who quietly diverts funds, a forged check that clears a business account, or a wire transfer sent to a fraudulent vendor because someone in accounting was deceived by a convincing email. Those losses require a crime policy.

Common insuring agreements in a commercial crime policy include:

• Employee theft: covers direct financial loss from a dishonest act by one or more employees, including theft of cash, inventory, or securities over time.
• Forgery or alteration: responds when someone forges or alters a check or similar financial instrument drawn on the business.
• Funds transfer fraud: covers loss resulting from a fraudulent instruction that causes a bank to transfer funds out of the business account.
• Computer fraud: applies when a criminal uses unauthorized computer access to take money or securities from the business.
• Social engineering fraud: covers loss when an employee is manipulated into voluntarily wiring money to a scammer, typically added by endorsement and may carry its own sub-limit.

Does each insuring agreement carry its own limit?

Each insuring agreement typically has its own limit and its own deductible. The scope of coverage depends on which agreements the business actually purchases. Reviewing the declarations page confirms which agreements are active and what their limits are before a loss occurs.

What is a real example of a commercial crime claim?

For example, a bookkeeper at an Augusta contracting firm quietly writes company checks payable to a fictitious vendor over twelve months, diverting $60,000 before anyone notices. The commercial property policy does not respond because employee dishonesty is excluded from standard commercial property forms. A commercial crime policy covering employee theft would reimburse that loss, minus the deductible. A single claim of that size can exceed several years of premium.

Which businesses carry the most exposure to crime losses?

Businesses that handle cash, process customer payments, manage payroll, or give employees access to financial accounts carry real exposure to crime losses. The same is true for businesses that regularly pay vendors by wire transfer. Social engineering schemes targeting those payment workflows have increased significantly. For more on other commercial coverage gaps, see our FAQ on what other commercial coverage Georgia businesses typically need. Businesses concerned about digital crime exposures may also need cyber liability coverage alongside a crime policy, since the two products address different but overlapping risks. See our FAQ on whether your small business needs cyber insurance.

For example, a 15-person property management firm in Atlanta receives an email that appears to come from a regular vendor. An accounting staff member wires $22,000 to the fraudulent account before the scam is discovered. Standard commercial property and general liability policies do not cover that loss. A crime policy with a social engineering endorsement would respond, subject to its sublimit.

Crime coverage is often added alongside a business owners policy or a commercial package, but it is a separate policy form with its own underwriting and claims process. For more on what qualifies a business for a BOP in Georgia, see our FAQ on what businesses qualify for a BOP.

A licensed advisor can review current policies, identify which crime exposures are already covered and which are not, and recommend appropriate limits. Request a free coverage review to get a clear picture of where the business stands.