Crime and Theft Insurance: Why They are Treated Differently

02 Sep 2016

Ryan Hanley

Ryan Hanley is the vice president of marketing at TrustedChoice.com and the managing editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, "Content Warfare." Ryan has over 12 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.

As a small business owner, you surely have property insurance, which covers a wide array of circumstances, including some instances of theft. But do you know where your coverage ends and vulnerability begins? Believe it or not, crime and theft insurance are not interchangeable, and your property insurance may not provide the coverage you need.

To better understand how your insurance company views crime and theft, let’s consider property insurance and how it works for business owners. Property insurance offers a “blanket” policy that provides protection against unexpected occurrences like fires and natural disasters, and some instances of theft. It does not, however, protect your business against employee theft, stolen cash and other categories of crime.

What is crime insurance?

Crime insurance is available to better target your protection against specific types of theft that may affect your business, including:

  • Employee theft: The U.S. Chamber of Commerce estimates that 75 percent of employees will steal from a company at least once, and the probability of employee theft is 15 times greater than external theft. Fortunately, you can guarantee you’re protected against employee theft if you add employee theft coverage as part of a crime insurance policy.
  • Forgery: Even if your business uses a “two-signature” system to minimize the risk of forgery, there are no guarantees that your company can prevent forgery issues from arising. But with forgery coverage, your business is protected.
  • Robbery: Consider this common business scenario: A small business owner asks an employee to take money from the office and deposit it at the bank. But if the employee gets robbed on the way to the bank, will the business owner be covered for the financial losses? Property insurance won’t cover the loss of money; conversely, crime insurance with robbery protection will.

Crime insurance represents a valuable tool for business operators because it enables them to fill in gaps in their property coverage.


Also on StartupNation.com: How to Manage Business Insurance


How do I know if I need crime insurance?

To fully evaluate your crime insurance needs, here are four questions to consider:

  1. What property am I worried about? One major difference between your general property insurance and crime insurance, is that your property insurance likely does not cover cash. Talk to your agent about which items you want to protect, how vulnerable those items are, and whether you’ll need the additional coverage crime insurance provides.
  2. Who could steal my property? Does the nature of your business leave you open to the risk of employee theft? If so, you may need this added coverage.
  3. Where are my valuables located? It’s important to remember that theft coverage under your property insurance may not cover things that aren’t at your main place of business. Do you have property or cash that is separated from your main headquarters? You may need crime insurance.
  4. How could my valuables be stolen? If property like cash, computers or other business items move between locations frequently, they may be at risk. Property insurance is unlikely to cover the theft of these items, while crime insurance, which is very specific about how items are stolen, will.

While many business operators feel embarrassed about buying crime insurance as a protection against their own employees, you should keep in mind that crime insurance policies may only be taken out on trustworthy employees. This means that if you purchase crime insurance, you’re actually showing your employees that you believe they are trustworthy.

Crime and theft are two entirely different things in the insurance world. But with an expert insurance agent at your disposal, you can find the right combination of crime and property coverage to fully protect your property and belongings both now and in the future.

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