Does your business have crime insurance?

By Higginbotham on December 20 , 2016

Employee theft crime insurance

On November 20, 2016, a Wichita Falls man was arrested and charged with theft for stealing more than 23,800 pounds of metal from his employer and selling it as scrap, pocketing a good $29,000 in cash. As reported by the Dallas Morning News, Ronald Gene Clark, 57, had been stealing large quantities of stainless steel tubing and brass from Motion Industries, where he worked as an office manager, for some time. After completing a thorough review of its inventory, the company concluded they had lost a total of $125,623.81 since May 2015 due to Clark's thefts.

That’s a sobering wakeup call for any business owner.

But the fact is, more commercial property loss is due to crime-related incidents than to any other cause. And employee theft is one of your biggest vulnerabilities, although certainly not the only one. There are seemingly endless ways you can get burned by crime, including:

  • Check forgery or alteration
  • Employee theft
  • Theft of securities or money
  • Robbery or safe burglary
  • Theft outside the premises
  • Funds transfer fraud
  • Computer fraud
  • Counterfeit money or money order fraud

With many of these crimes, the activity can stay hidden for months, even years, which only compounds the loss. To protect your business from these exposures, you need a robust risk management strategy, and one key ingredient you should consider is commercial crime insurance.

Do you need crime insurance?

Many business owners don’t consider it a necessity, but with employee theft, cyber-crimes and other criminal activity on the rise, you’re rolling the dice without it. If you get hit and don’t have crime insurance, the financial fallout could be devastating and could even put you out of business. Every business owner should consider crime insurance, particularly if your business:

  • Is a small to medium-sized operation with limited resources for security
  • Engages in cash, check or credit card transactions
  • Has employees who handle financial records and customer data
  • Hires part-time employees or volunteers
  • Has inventory and products that can easily be used and taken by employees

What does commercial crime insurance cover?

Crime coverage can protect your business from a number of risks including:

  • Loss of money through theft by an employee or someone else. It can also cover you if the money is stolen while you’re at the bank or while transporting the cash from your business to your home or bank.
  • Employee theft. According to the Association of Certified Fraud Examiners, the average business will lose about 6 percent of its revenues from employee theft. Some will lose much more, especially those that don’t have crime insurance.
  • Accepting counterfeit money. It’s important to be vigilant, but mistakes happen. Commercial crime insurance will cover you if you accept counterfeit cash, fake checks and other forged instruments of payment.
  • Cyber-crimes. With developments in business technology growing so rapidly, business owners are becoming more and more vulnerable to fraud, data theft and other crimes involving computers, from both internal and external perpetrators.

Don’t risk it all

While many business owners have implemented solid internal controls, there’s always the possibility that those controls will be breached by employees or outside third parties. Commercial crime insurance provides the failsafe your business needs against these risks. Even if your business has been lucky enough to escape being hit with any type of crime, the risks are growing. So it makes sense to protect yourself.

Contact us at Higginbotham Insurance today to talk about a commercial crime insurance policy tailored to your business needs.

Tags: Risk Management, Business Insurance


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