What is 'Business Crime Insurance'

Business crime insurance is a type of insurance policy that a business can buy to protect itself from losses from business-related crime. Protection through the policy can cover cash, assets, merchandise or other property loss when a someone perpetrates fraud, embezzlement, forgery, misrepresentation, robbery, theft or any other type of business-related crime on the company.

BREAKING DOWN 'Business Crime Insurance'

Business crime insurance is available because most commercial property or business policies do not cover crime-related losses. Companies can purchase business crime insurance as part of a commercial package policy, also called "special multiperil insurance," which is package of different policies to protect the business from crime, property loss, liability and other types of potential loss situations a business could encounter. A business can also purchase business crime insurance as a standalone policy to add to the other insurance policies or package it has purchased. Purchasing as a standalone policy allows the business to specify which types of crimes it wants the policy to cover, which can be useful for businesses that are vulnerable to certain types of business crimes but not others. However they purchase insurance, companies should be aware that business crime insurance isn’t automatically covered in a commercial business package policy unless they specifically include it in the package.

Business crime is a significant liability for companies. According to the Association of Certified Fraud Examiners (ACFE), U.S. organizations are liable for more than $400 billion every year, from fraud and abuse alone. The problem is widespread, although small businesses are most vulnerable to business crimes, in part because they have fewer personnel to enact safety and auditing procedures and in part because the small sizes of these businesses mean that owners and managers tend to trust their employees personally, since they are in more contact with the employees every day. Considering that the average across the companies studied by the (ACFE) was a loss of $9 per employee per day, this loss is more significant and damaging to smaller companies with fewer resources than to larger companies. As innovations in business operations technology explode exponentially, these innovations create more opportunity for small business owners to be defrauded with this technology, either by employees or outsiders. 

Business crime insurance protects the assets, operations and reputation of businesses of all sizes, and is especially important for businesses that deal in cash or in online payment systems, whether those use credit cards or other types of payment methods. A business crime insurance policy will usually have different limits of coverage for losses incurred on the property of the business vs off-property. 

Examples of ‘Business Crime Insurance’

A business insurance policy would pay out to a business that lost cash that was stolen from a cash register by an employee, money embezzled by an employee through an electronic payment system, merchandise stolen by a robber, money lost by forged checks or payment authorizations, inventory that walked out the door during a busy time of day or any other similar situations. 

  1. Commercial Lines Insurance

    Commercial lines insurance helps keep the economy running smoothly ...
  2. Against All Risks - AAR

    An against all risks insurance policy provides coverage against ...
  3. Business Liability Insurance

    Business liability insurance protects a company and/or business ...
  4. Assessable Policy

    Assessable Policy is a type of insurance policy that may require ...
  5. Casualty Insurance

    Casualty insurance is a broad category of coverage against loss ...
  6. World Insurance

    World insurance is a commercial liability policy that provides ...
Related Articles
  1. Insights

    Sentences For White-Collar Criminals: Too Harsh Or Too Lenient?

    Here's a look at the incarceration of some recent white-collar criminals and if their time in jail was fair and just.
  2. Insurance

    Insurance Coverage: A Business Necessity

    Don't go to work without this policy in place - especially if your work is in your home.
  3. Small Business

    Creating a Risk Management Plan for Your Small Business

    Learn how a complete risk management plan can minimize or eliminate your financial exposure through insurance and prevention solutions.
  4. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
  5. Insurance

    12 Insurance Questions for High Net Worth Families

    High net worth families should ask themselves these 12 questions regarding comprehensive insurance.
  6. Insurance

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about homeowner's insurance to protect their residence.
  7. Insurance

    How and Why Businesses Should Insure Key Personnel

    Here are three tips to help business owners make the right decisions when insuring key personnel.
  8. Financial Advisor

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  9. Insurance

    The Importance Of Property Insurance

    Property insurance is important, but there's a lot you need to learn in order to get the proper coverage.
  10. Insurance

    Is Loan Protection Insurance Right For You?

    Loan protection insurance can keep you from defaulting on your loans when you're in financial trouble, but it's not for everyone. Learn more on how it can help you.
  1. How does the insurance sector work?

    Learn more about the insurance sector, a historically safe place for equity investors and the home of some of the largest ... Read Answer >>
Trading Center