Commercial crime insurance for theft from inside and out
Property and liability policies generally don't cover money taken by an employee, a forged check or a fraudulent wire transfer. Crime insurance is written for those losses. We help you choose the insuring agreements and limits that match how money moves through your business.
The building blocks of a crime policy
The ISO commercial crime form is organized into separate insuring agreements, each with its own limit. Carrier forms often follow a similar structure. You choose which to buy.
Employee theft
Theft of money, securities or other property by an employee, whether or not the employee is identified.
Clients' property
Theft by your employee of a client's property, often added by endorsement for service businesses and property managers.
Forgery or alteration
Forged or altered checks, drafts and similar instruments drawn on your accounts.
Inside the premises: money and securities
Theft, disappearance or destruction of money and securities on your premises or at a bank.
Inside the premises: robbery or safe burglary
Robbery or safe burglary of other property on your premises.
Outside the premises
Money, securities and property while being carried by an employee or messenger, such as a bank deposit run.
Money orders and counterfeit money
Accepting money orders that aren't paid or counterfeit currency in the regular course of business.
Computer and funds transfer fraud
Fraudulent entry into your computer systems, or fraudulent instructions to your bank, that transfer money or property.
Social engineering fraud
An employee is tricked into sending money by an impostor posing as a vendor, executive or client. Usually a separate endorsement with its own sublimit.
ERISA fidelity bond
Required for most people who handle funds of an ERISA-covered retirement plan. Can be written within a crime policy or as a standalone bond.
Three details that decide crime claims
Discovery or loss sustained
A discovery form covers loss you discover during the policy period, even if the theft began earlier. A loss sustained form covers loss that occurs during the policy period, with provisions for losses under prior policies. Embezzlement often runs for years before it is found, so the form and any prior-coverage terms matter when you change carriers.
Social engineering is not automatic
Courts have reached different results on whether computer fraud coverage applies when an employee was deceived into authorizing a payment. Many carriers address this with a separate social engineering endorsement, typically with a lower sublimit and conditions such as a verification callback before paying changed bank instructions. If your policy has a callback condition, your procedures need to follow it.
Owners and known dishonesty
Standard crime forms exclude theft committed by you, your partners or members. Coverage for an employee also generally ends once an owner or officer not in collusion learns of a dishonest act by that employee, so a known problem should be raised with your broker right away.
Businesses where money changes hands
Any business with a bookkeeper
One trusted person writing checks, reconciling accounts and paying vendors is the classic embezzlement exposure.
Retail and hospitality
Cash handling, deposit runs, refunds and point-of-sale access.
Contractors
Large vendor payments and changing payment instructions from suppliers and subs.
Property managers
Tenant deposits and owner funds held in trust.
Nonprofits
Donations, small staffs and volunteer treasurers.
Retirement plan sponsors
Plan officials who handle 401(k) funds generally must be bonded under ERISA.
The fidelity bond retirement plans require
Under ERISA, each plan official who handles plan funds generally must be bonded for at least 10% of the funds handled, with a minimum of $1,000 per plan and a maximum required amount of $500,000 per plan, or $1,000,000 for plans that hold employer securities. Exceptions apply; your plan administrator and our benefits team can confirm what your plan needs.
401(k) and retirement planningReduce the chance of a crime loss
Separate duties
The person who pays bills should not also reconcile the bank statement or add new vendors.
Verify payment changes
Confirm any new or changed bank instructions by calling a known number on file, never one in the email.
Use bank tools
Positive pay, dual approval for wires and ACH, and daily account review.
Review and rotate
Owner review of statements, required vacations and periodic surprise audits.
Crime insurance questions
Doesn't my property policy cover theft?
Property policies may cover theft of physical property by outsiders, but they typically exclude or sharply limit theft of money and securities and exclude dishonest acts of employees. Crime insurance is designed for those losses.
Does cyber insurance cover wire fraud?
Some cyber policies include funds transfer or social engineering coverage, and some crime policies do too. The two can overlap or leave gaps, so we review them together.
What is the difference between a crime policy and a fidelity bond?
The terms are often used interchangeably. Employee theft coverage is sometimes called a fidelity bond. ERISA bonds are a specific type required for retirement plans. Surety bonds, by contrast, guarantee your performance to a third party.
How much employee theft coverage should we carry?
Consider how much money one person could reach over the time it might take to discover a theft — not just what's in the account on a given day. Lenders, bonding companies and some contracts also set minimums.
Are owners covered if they steal from the company?
Generally no. Standard forms exclude theft by the named insured and its partners or members. Some forms address this for certain entities; ask us about yours.
We found a theft. What should we do first?
Preserve records, limit the person's access, and notify your broker promptly. Crime policies have notice and proof-of-loss deadlines. Talk to counsel before confronting anyone.
Get a crime insurance quote
Crime coverage is often written with D&O, employment practices and fiduciary liability in a management liability package. Tell us about your business and we'll compare options.
Coverage descriptions are general summaries for education. They are not legal, tax or coverage advice, a statement of coverage, an offer or a binder. Coverage, limits and eligibility are governed by the terms, conditions and exclusions of the policies issued and are subject to underwriting.