In this revolutionizing world of business, the risk of criminal activities is on the high side. Therefore, businesses and large companies need to protect their assets from several types of illegal activity. Business crime insurance is a specialized type of coverage that shields companies and business owners from financial damage resulting from crimes, such as theft, fraud, embezzlement, and vandalism.
In contrast to standard property insurance, business crime insurance aims to tackle unique risks and perils that companies encounter during their day-to-day operations. This type of coverage also functions as a safety net that lessens the negative effect of criminal activity on business operations and finances.
In this comprehensive article, we will explore the difficulties of business crime, the type of coverage it offers, its exclusions, including other reasons why it is an essential part of a company’s overall risk management strategy.
What Is Business Crime Insurance
Business crime insurance, also known as commercial crime insurance is a type of coverage specifically designed to offer protection to businesses and companies against crime-related losses. This type of insurance policy provides financial protection and security for losses incurred from criminal activities committed by either an employee or a third party.
Generally, business crime insurance offers coverage in the event of theft, fraud, embezzlement, forgery, or email scams. If your business suffers from any of these, your insurance policy will provide a reimbursement up to the limit of your policy.
Who Needs Business Crime Insurance
Business crime insurance is often purchased by business owners and companies who seek financial protection against certain risks and perils. It is typically designed for every type of business that runs smoothly with the help of other people. If you run a business that deals with huger cash transactions daily or you handle sensitive data and valuable inventory, we highly recommend business crime insurance.
Whether you run a small business or a large organization, you can benefit greatly from business crime coverage. In essence, any business that intends to safeguard the interest of their customers and protect their assets, alongside financial stability, should consider purchasing business crime insurance.
What Does Business Crime Insurance Cover
Business crime insurance offers maximum coverage and financial protection for business-related crime. If you have business crime coverage, your policy should cover;
- Employee fraud.
- Theft of cash.
- Cyber fraud.
- Email hacking.
- Fraudulent changes to bank details.
- Credit card fraud.
- Cyber vandalism.
- Cyber extortion.
What Is Not Covered By Business Crime Insurance
Even though business crime coverage offers protection in the vent of criminal and fraudulent activities, the policy does not provide coverage in every situation. There are limits to what a business crime insurance offers coverage for. Here are some of the exclusions of this type of insurance;
- Loss of income.
- Employee fraud exceeding policy limits.
- Unverifiable thefts.
- Liability and legal expenses of third parties.
- Damage to building and equipment, except it is related to robbery.
- Theft of intellectual property.
- Theft of business popery and equipment.
- Loss due to negligence.
- Fraudulent transfers without physical evidence.
It is essential to always review the content of your policy in order to have a full understanding of what it covers. Most people don’t read the fine print of their insurance policy and end up not being aware of the type of coverage they have, including the limitations.
How Much Does Business Crime Insurance Cost
The exact amount you will be charged for coverage under a business crime insurance policy typically depends on several factors, including the following;
- The number of employees you have
- The type of insurance company you work with
- Annual revenue of your business
- The deductible and policy limits you chose
These are just the common factors most insurance companies consider before setting your premiums. Most times, the provider also looks into whether or not you have safety measures in place to help prevent business crime. In addition to this, if you have high-value assets within the premises of your business or company, the insurance company will factor it in when determining how much you will pay for coverage.
Tips on How to Prevent Business Crime
Sometimes, business crime occurs due to recklessness and negligence on the part of the employees or volunteers. However, regardless of whether it is caused by an employee or third party, several ways and methods can be applied to prevent business crime. We have helped to curate some useful tips below;
- Ensure you lock all entrance doors
- Keep track of cash transactions efficiently.
- Install security systems such as alarms and CCTV
- Train your employees on safety protocols
- Limit access to sensitive information and areas
- Use secure payment methods
- Report suspicious activities immediately
- Install adequate lighting within the premises
- Monitor your data regularly for threats and potential risk
By implementing this strategy, there is a greater chance of preventing potential business-related crime from occurring. Companies and business owners should pay more attention to utilizing cyber security measures as this would help to prevent fraudulent activities.
How to Buy Business Crime Insurance
If you share a motive for purchasing business crime insurance, you can get it from insurance companies that sell different types of business insurance. However, before proceeding with your purchase, the first thing you need to do is assess your specific needs and the type of potential risk your business faces. Once you are done evaluating your needs and risk level, you can now shop around and compare coverage options from different insurance providers.
You can consult with an insurance agent or broker who specializes in commercial insurance. They are in the best position to provide guidelines on business insurance policies that suit your unique circumstances. Once you have selected the policy you need, review the terms and conditions of the insurer, then proceed with the payment for the premium.