Crime insurance is a broad term that is applied to insurance coverage that protects an individual or business from damages or a loss of property due to the commitment of some type of crime. This often includes losses that are incurred due to the theft of physical property as well as the theft of intellectual property, such as an employee securing and selling the client list of an employer to a competitor. In order to file a claim, the crime must be among those covered in the terms of the insurance contract.
Many employers maintain some type of crime insurance at all times. This is especially true for businesses that operate in more than one country. Often, the business will secure national crime insurance for each country where the corporation has a physical presence. However, even a small business can obtain commercial crime insurance and thus provide protection from situations such as an employee choosing to steal the daily take rather than deposit the funds into the company’s operations account.
The scope of crime insurance coverage will vary, depending on the level and type of coverage desired by the client. While just about any crime insurance policy will cover situations where the theft of furnishings, computer equipment or machinery necessary to the function of the business takes place, it is often necessary to request coverage for the theft of intellectual property. While a small business may not see the need for anything other than protection in the event of theft of office equipment, it is often a good idea to at least consider what intellectual property could be stolen and damage the company. For example, the small business owner should consider what damage could result from the theft of the company’s client list, accounting software files, and other information related to the internal functioning of the business.
Today, crime insurance can provide protection related to a wide range of losses. Along with the theft of office furnishings and computers, many policies will also provide coverage in the event of computer fraud, hacking, or forgery of documents. Reading the fine print of any crime insurance package is important, as not every insurance of this type will cover unlawful actions taken by employees. If this is the case, then the use of fidelity bonds on employees may be necessary, especially if current governmental regulations prohibit the sale of crime insurance to cover losses due to illegal actions by employees.
