Crime insurance

Crime insurance pays a business back for money or property it loses to a specified criminal act, after the deductible and up to the limit of the coverage that applies. A policy is built from separate insuring agreements, such as employee theft, forgery, or money and securities, and a loss is paid only when it fits one the business actually bought.

How a crime claim is paid, with real policy numbers

One commercial crime policy carries a $3,000,000 single-loss limit and a $25,000 deductible, according to a Connecticut Insurance Department examination report (opens in a new tab). Apply those figures to an illustrative $100,000 employee dishonesty loss:

That payment assumes the loss is covered, falls within the right insuring agreement, and meets every policy condition. A sublimit, aggregate, or missed reporting deadline can still reduce it.

Repeat thefts can count once. Employee dishonesty limits apply per loss, and acts involving the same employee or group of employees may be treated as one occurrence, according to the Connecticut Insurance Department glossary (opens in a new tab).

Coverage parts, limits and deductibles you can choose

Each piece of crime coverage has its own definitions and exclusions:

• Employee dishonesty or employee theft covers direct loss from dishonest acts of covered employees, written on a blanket basis for all employees or a scheduled basis for named ones.
• Forgery and alteration addresses forged or altered instruments and documents.
• Money and securities covers theft, disappearance, and destruction, often with different limits inside and outside the premises.
• Robbery and safe burglary address losses involving force, unlawful entry, or protected safes.
• Computer fraud and funds transfer fraud address specified electronic events under their own terms.
• Client's property can extend protection to property held in your custody or control.

A per-loss limit caps payment on one covered loss, while an aggregate caps total payments for the policy period. A higher deductible leaves the business paying more of each covered loss and may lower the premium. Some policies cover losses that happen during the policy period, while others respond to losses first found during it.

One New Jersey school district carried $500,000 for public employee dishonesty, $50,000 for money and securities, and $500,000 each for forgery and computer fraud, all with a $1,000 deductible, according to its June 30, 2023 insurance schedule (opens in a new tab). Contracts can set minimums: Rhode Island state subawards require combined crime limits of at least $500,000 per occurrence, or 50% of the contract value or divertible funds if greater, under the Rhode Island subaward insurance conditions (opens in a new tab), and one New Jersey state contract (opens in a new tab) requires at least $1,000,000 of employee dishonesty coverage. The premium moves with the limit, deductible, covered employees, cash handled, security controls, prior losses, and selected parts.

Where crime coverage shows up in your paperwork

Crime insurance belongs to business insurance, not personal policies. It can arrive as a standalone commercial crime or fidelity policy, as a crime part inside a commercial package policy, or as an endorsement on a businessowners policy or property program.

It appears on the quote, the binder, and the declarations page, which lists limits, dates, deductibles, and covered persons or locations, and a renewal notice may show a changed limit or deductible. After a loss, a claim letter may cite a specific insuring agreement, a reservation of rights, or a denial. A lender, landlord, or customer may ask for proof on a certificate of insurance.

Connecticut rules on fidelity coverage

In Connecticut, an insurer cannot shorten the time to sue or demand arbitration under a fidelity or surety bond to less than three years from when the loss occurs, under Conn. Gen. Stat. § 38a-290 (opens in a new tab); other policies carry a one-year minimum. A condominium association must keep fidelity insurance or a fidelity bond covering people who handle association funds, subject to the conditions and alternatives in Conn. Gen. Stat. § 47-255 (opens in a new tab).

Questions to ask an agent or insurer

1. Which crime insuring agreements are included, and what limit and deductible applies to each? A policy may leave some parts out.
2. Does the policy cover losses that occur during the policy period or losses first found during it, and what are the reporting deadlines? The form decides which policy period responds.
3. Who counts as an employee, including owners, temporary workers, contractors, or an outside bookkeeper? Employee theft coverage turns on that definition.
4. Are social-engineering, fraudulent-instruction, computer-fraud, and funds-transfer losses covered separately? These parts often carry their own exclusions and sublimits.
5. Are customer or client funds and property covered, and who receives payment? Property of others may need a specific endorsement.

Frequently asked questions

Short answers for owners looking at a quote or a loss.

Does crime insurance cover employee theft?

It can, through employee dishonesty or employee theft coverage. That part pays for direct loss from fraudulent or dishonest acts of covered employees. The employee definition, limit, deductible, and exclusions decide what is paid.

Does commercial property insurance cover crime losses?

A property policy may pay for physical property stolen by a covered peril. Embezzlement, forged checks, computer fraud, and funds transfer fraud may need separate crime insuring agreements or endorsements.

Is a fidelity bond the same as crime insurance?

The terms overlap when "fidelity bond" means employee dishonesty insurance. A surety bond is different: it involves three parties, with a surety answering to an obligee if a principal fails to perform or pay, according to the NAIC Statistical Handbook (opens in a new tab).

Does crime insurance cover cybercrime?

It may cover specific computer fraud or funds transfer fraud losses. Data breach and privacy liability protection may require a separate cyber policy.

When should a suspected theft be reported?

Report it promptly rather than waiting for an internal investigation to finish. The policy's notice and proof-of-loss conditions can affect payment.