5 Important Crime Insurance Coverages
Crime in Washington State and the rest of the United States has increased over the years, from shoplifting to car theft to burglary. According to SafeHome.org, Seattle has one of the highest property theft rates in the country. Regardless of the current crime rate, crime insurance is something that most businesses should have. Most commercial property policies will exclude theft, so it is important to have insurance to cover these losses.
What is Crime Insurance
Crime insurance is a type of insurance that covers loss from theft. Theft is defined as “the unlawful taking of money, securities, or other property to the deprivation of the insured”. It is important to keep in mind that crime insurance does not prevent crime, but it does help you recover from the financial loss. Even if you have crime insurance it is extremely important to maintain proper security around your business’ premises. Filing lots of claims for crime will result in higher premiums, so only using it as a last resort is the best practice for saving the most money.
5 Things That Can be Covered?
Here are five different types of crime insurance and the types of things that they cover.
Employee Theft & Dishonesty
It is very common for a standard commercial property policy to exclude coverage for employee theft. Fortunately, this risk exposure can be covered by a crime policy. This type of coverage can be written on a scheduled or blanket basis. What this means is that there can either be specific coverage for a position or person, or it can be overarching for a broader range of coverage. The main difference is how the policy limits apply.
Blanket: the limit of insurance applies to each loss, and it doesn’t matter how many employees were involved in the loss. The employees committing the theft don’t even need to be identified.
Scheduled: there is an “each employee” limit of insurance that applies to the employee or position that is scheduled (specified) on the policy. Employees have to be identified for this type of crime coverage.
The property that is covered under an employee theft and dishonesty policy is theft of money and securities, and property other than money and securities.
Forgery & Alteration
This type of coverage pays for losses that arise out of forgery and alterations of checks, bank notes, and other similar things. Additionally, it provides coverage for legal defenses, which makes it a valuable coverage to have.
Computer Fraud & Funds Transfer
Standard commercial property policies will exclude theft via computer. This type of coverage is broken up into two segments:
Computer Fraud: using the insured’s computer system to fraudulently transfer money to outside of the insured’s premises.
Funds Transfer: when someone is pretending to be the insured and uses their legitimate passwords and codes to authorize the transfer.
These two coverages have been combined together into one coverage, known as Computer Fraud & Funds Transfer Fraud Coverage.
Burglary & Robbery
This type of coverage is ideal for people with a brick and mortar shop, such as a clothing store or a restaurant. These places typically handle a lot of cash every day and therefore could be at a higher risk of burglary and robbery. According to Insuranceopedia, burglary in insurance is defined as “someone uses force to unlawfully enter someone else’s property – even if they didn’t steal anything”. Robbery is defined by the same source as “perpetrators use intimidation or force (and even violence against a person or things) to obtain objects of value”.
Kidnapping, Ransom & Extortion
This type of coverage adds protection for the following things:
- Kidnapping an insured person.
- Threatening to kidnap, injure, or kill someone. This is referred to as bodily injury extortion.
- Threatening to destroy property or inventory, reveal a trade secret, or locking electronic data and requiring a ransom to unlock it. This is referred to as property damage extortion.
- Wrongful detention: involuntarily confining the insured.
Crime Insurance
To conclude, crime insurance has a plethora of options as far as coverages. Each one is specifically designed for a certain crime exposure, so take the time to speak with an experienced agent who can help you decide which ones are right for your business. Contact Narrows Insurance today to inquire about crime insurance for your business!
