DEFINITION of 'Mercantile Safe Burglary'

Insurance coverage for money, securities, and other assets that are stolen from a safe or vault. Mercantile safe burglary insurance is an outdated form of insurance coverage that was purchased by businesses who used safes, and was included in commercial property insurance policies.

BREAKING DOWN 'Mercantile Safe Burglary'

Before the rise of electronic payments, businesses conducted most of their transactions in cash. This cash, along with other valuables that the business wanted to protect, was stored in a safe overnight for protection. Safes presented a target of opportunity for burglars who would use tools, explosives, and other means to open them. Because the loss of cash and valuables could severely damage a business’ ability to stay open, merchants and shopkeepers would purchase mercantile safe burglary insurance.

Mercantile safe burglary insurance covers not only the assets that may be stolen from a safe, but also property that may be damaged during the burglary. For example, a thief may use explosives when opening a safe, which may severely damage parts of the building where the business is located. Coverage was limited to the hours after a business was closed for operation.

Insurance companies offering mercantile safe burglary insurance typically charged policyholders lower premiums if they installed security systems, hired security guards, and took other precautions to increase safeguards for their valuables. The policy document required the policyholder to provide in-depth information about the type of safe or vault used, including the manufacturer, serial number, style, and size.

Banks, which also used vaults and safes to store cash and valuables, typically did not purchase mercantile safe burglary insurance. Instead, they purchased bankers burglary insurance, since this type of insurance extended coverage to daylight hours when a robbery may occur.

Mercantile safe burglary insurance fell out of favor as the insurance industry changed the way it provided coverage for commercial property insurance.

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