Crime insurance
Buying Crime Insurance for your commercial establishment can be a treacherous path. There is no such term as "Crime" in insurance policies. "Crime" to the insurance industry is simply a phrase to describe a selection of individual coverage's chosen by the policyholder. Fire Insurance Coverage's that you buy for buildings, stock, and equipment provide very little in the way of crime coverage's. Most Fire Insurance policies will extend to provide cover for an act of vandalism but not much more. Insurance for acts of crime must be purchased separately, and are usually offered by insurance companies, as individual coverage's. We want to take this opportunity to outline criminal definitions used in the insurance industry to help you determine what crime coverage's you are carrying and what crime coverage's you should be carrying.Robbery and Holdup
Robbery and Holdup is the felonious taking of money, securities and other property using force, violence, or the threat of violence. Premises cannot be robbed. Only people can be robbed. This means that if you carry Robbery and Holdup coverage, you have coverage, only when the premises are open for business, and your business funds are in the custody of an employee. This also means that a criminal must enter the premises under these conditions and "rob" your employee of the funds using the threat of violence. This coverage appears on your policy as Robbery/Holdup or Inside/Outside Holdup. Coverage is minimal in its scope and the premium for $2,000.00 coverage is usually less than $25.00 per year. The Robbery and Holdup coverage can be extended to include Theft from Night Depository, or theft from the home of a custodian, if funds are taken home by you or an employee at night, but unless the cover is extended, only a Robbery from the premises or a robbery on the way to the bank are insured.Burglary
Premises that are closed for business are burglarized. Burglary coverage means that you have coverage when someone breaks into your premises at night when those premises are closed for business, and destroys property and feloniously takes property, money, or other negotiable securities. Unless you have a special burglar resistant receptacle for holding money overnight in the premises, most insurance policies exclude loss of funds left in the premises, but losses to stock, equipment and other non-monetary property can be easily covered. Coverage for burglary damage or loss to stock and equipment is called Mercantile Stock Burglary coverage. If you have been granted coverage for loss of funds left in the premises overnight, such coverage would be called Broad Form Money and Securities. Both coverage's are sold in multiples of $1,000 of coverage and you are free to select the limit of coverage appropriate for your business. Coverage in either case will not be recognized unless there is physical signs of forced entry into the premises.If your Fire insurance is on a Broad Form basis, or an All Risk basis, you may not need to carry burglary coverage for your stock and equipment, because it is probably included in the fire coverage carried, but no fire coverage for buildings, stock and equipment will recognize money or other negotiable securities as forming part of buildings, stock, or equipment.
Stealing
I'm not a police officer, nor am I a lawyer, so I can't give you any form of legal definition for stealing, but there is no insurance policy available for "stealing". You must be able to identify how property went missing and have coverage for that specific criminal act. We as layman make certain assumptions. If a specific articles was "there" yesterday and is "gone" today, we make an assumption that it was "stolen". Insurance companies do not recognize this. You must be able to prove that your premises were burglarized, or you must have been robbed before coverage, if you carry the coverage, will trigger.Employee Crimes
When property or money has disappeared due to the criminal act of an employee, your crime coverage will not respond unless you carry an "employee dishonesty bond". All crime coverage's as issued and priced by insurance companies are based on an outsider committing the criminal act, not an employee who is in an entrusted position. We strongly recommend that you carry a Bond. Call us for a copy of our Customer Information Bulletin which focuses on employee crime.Conversion
Conversion is not a crime to insurance policies. If you have given property to someone and they have not returned the property as they should have, you are the victim of a conversion, and as such are not the victim of a robbery or a burglary, and you have no coverage.Damage to a Building Caused by a Burglary
If you are the owner of a building and carry only a specified perils form of fire coverage on your building, you probably need to enhance your building fire insurance coverage by including a small limit of insurance for damages done to the building during the course of a break-in. You may also be obligated to pay these repairs if you are a tenant in a building.Safe Burglary
A separate coverage that is available for damage or loss to your safe or the property contained within your safe. This coverage can be purchased separately, but usually is added, if you have a safe, to some other form of crime coverage being carried under the policy.Article last changed on: 11-16-2008 at 18:40
