Standard Commercial Crime Insurance Policies

A commercial crime insurance policy typically provides several different types of crime coverage, including:

  • Employee dishonesty coverage
  • Forgery or alteration coverage
  • Computer fraud coverage
  • Funds transfer fraud coverage
  • Kidnap, ransom, or extortion coverage, and
  • Money and securities coverage, to name the basic available types

Employee dishonesty coverage provides protection against theft of money or property and dishonest acts committed by your employees. Forgery or alteration coverage protects your business in the event that your company’s business checks, drafts, promissory notes, consignments, or similar documents are compromised. An attached endorsement can protect against loss due to incoming documents as well.

Computer fraud coverage protects your business against loss resulting from malicious misuse of your computer system with the intent of securing financial gain by an individual or group, or with the intent to cause a loss of property, monies or securities. Funds transfer fraud coverage, as the name suggests, protects against wire transfer fraud, money order fraud and counterfeit fraud.

Kidnap, ransom and extortion coverage protects against loss due the extortion (or kidnap) of an insured’s employees or family member in exchange for ransom, whereas the individual(s) or property is subject to damage or harm. Theft of money and securities coverage provides protection of the theft, disappearance or destruction of your money inside your place of business or with an employee or owner off-site.

Two basic types of coverage available

Commercial crime insurance is now widely available as a discovery policy or loss sustained coverage. Insurance Services Office, Inc. (ISO) rates are the same for the two forms.

The discovery form has long been the standard in financial institution bonds (e.g., bankers blanket bonds). It’s now available for commercial crime insurance policies as well and it offers some advantages over loss-sustained. Under the discovery form, coverage applies to all losses first discovered during the policy period, while under the loss sustained form, the policy that provides coverage is the one in force at the time the loss occurred, unless the time limit to report claims under that policy has expired.

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