3 Types of Crimes Covered by Commercial Insurance

Businesses everywhere are vulnerable to a variety of crimes and schemes, whether they are committed by outsiders or the employees themselves. Commercial crime insurance can cover a variety of crimes depending on the organization’s specific needs and risks.

1. Ghost Payroll 

Ghost payroll is a type of fraud where the employer pays the salary of non-existent workers. This money is placed into one or multiple fraudulent shell accounts where the criminal can claim the money. This scheme can go undetected for months depending on the business’s funds and size, and its impact increments during that time. Source: World Wide Specialty Programs

2. Embezzlement 

Embezzlement occurs when an employee misappropriates or outright steals company funds or property. The employer, a fellow employee, or a business partner can entrust these stolen resources. This crime varies in scale, from a cashier taking a few dollars from the register to executives placing millions in a personal bank account.

3. Theft of Trade Secrets

Most businesses within the same industry have information that gives them a competitive edge against others. These trade secrets are generally specific business strategies, procedures and methods. Theft of these trade secrets takes place when an unauthorized party obtains and publishes the information, removing the company’s advantage and potentially reducing profits.

Theft, fraud, and other crimes have a strong financial impact on businesses and their employees. Owners can use personalized commercial crime insurance to mitigate these losses and protect their organizations.

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