Even when employers take steps to hire trustworthy workers and implement solid security measures to help protect against external fraudsters, criminal activities may still arise. Whether these crimes entail a deceitful employee embezzling company funds or a corrupt third party stealing valuable inventory, they can often leave impacted organisations with serious financial losses.

Fortunately, that’s where commercial crime insurance can help. Also known as fidelity insurance, this cover can reimburse organisations for losses caused by various business-related crimes. In other words, commercial crime insurance plays a major role in helping organisations preserve their finances when they are targeted by criminal activities.

With this in mind, it’s best for employers to clearly understand this type of cover and its main protections. This article highlights the value of commercial crime insurance by explaining common policy features and outlining key cover benefits.

Common Policy Features

The primary form of cover included in a typical commercial crime policy provides financial protection for losses caused by employee dishonesty, which may encompass the following criminal activities:

• Theft of money, assets or other commercial property—This entails employees stealing or robbing company funds or valuables (eg tools and equipment) while these assets are on-site and during transit.
• Forgery or alteration—This involves employees counterfeiting or falsifying corporate documents or other legal instruments with the intent to defraud.
• Computer or funds transfer fraud—This pertains to employees manipulating corporate computer systems or participating in fraudulent fund transfers, such as sending deceitful instructions to a bank that trick the institution into transferring company assets to a personal account.

In addition to securing cover for losses stemming from employee dishonesty, organisations may purchase certain policy endorsements for further financial protection against business-related crimes. Such endorsements may help cover losses from criminal activities committed by third parties, such as corrupt contractors or vendors (eg a contractor forges an employee’s signature on cheques to make fraudulent business transactions).

Further, some policy endorsements can help compensate organisations’ clients if they are affected by business-related crimes (eg an employee stealing valuable items from a customer while working at their home). Employers can consult insurance professionals to discuss their particular commercial crime policy endorsement options.

Key Cover Benefits

Commercial crime insurance can be especially useful for organisations that frequently engage in cash, credit or electronic transactions; store valuable items on-site or occasionally transport them off the premises; have inventory or stock that could be more susceptible to theft; or hire employees who will have access to expensive equipment or goods. Here are some key cover benefits for organisations to consider:

• Financial stability—A primary advantage of commercial crime insurance is that it can help organisations prevent business-related crimes from wreaking havoc on their finances. Since criminal activities can often generate substantial losses, maintaining financial stability during these incidents is vital.
• Enhanced credibility—Stakeholders are more likely to trust organisations that have appropriate risk management and loss control measures, including a robust insurance portfolio. By securing commercial crime insurance, organisations can demonstrate to their stakeholders that they are committed to protecting these individuals as well as their own operations against criminal activities.
• Peace of mind—Commercial crime insurance can ultimately help ease any stress regarding the risk of criminal activities. In conjunction with adopting adequate employee vetting and security protocols, purchasing this cover can provide peace of mind, equipping organisations with the resources and protection needed to navigate even the most difficult crime scenarios.

Conclusion

Commercial crime insurance can make all the difference in helping organisations reduce the fallout from business-related crimes, allowing them to foster ongoing operational success. By reviewing common policy features and key benefits provided by such cover, employers can tailor their commercial crime insurance to their needs.

Contact us today for more insurance solutions.