Crime Insurance covers financial losses due to employee theft, fraud, embezzlement, or forgery. It helps protect against internal threats that can devastate small businesses.
Crime Insurance
What Is Crime Insurance?
Crime Insurance protects businesses from financial losses due to employee theft, fraud, forgery, burglary, embezzlement, and cyber deception. Also known as fidelity insurance, it helps recover stolen funds or property when internal or external actors commit dishonest acts. It’s a key safeguard against one of the most common — and damaging — forms of business risk: employee dishonesty.
Who Needs Crime Insurance?
According to the Association of Certified Fraud Examiners (ACFE), the average organization loses 5% of annual revenue to fraud. These crimes often go undetected for months and may be committed by trusted employees. Standard commercial policies like Property or General Liability do not cover theft or fraud committed by insiders. Crime insurance closes that gap.
Common industries that often require Crime Insurance include:
- Any business that handles cash, payments, or sensitive data
- Businesses with accounting, billing, or procurement teams
- Nonprofits with volunteer financial oversight
- Companies in finance, retail, healthcare, or logistics
- Organizations without robust financial controls
What Does Crime Insurance Cover?
Crime Insurance typically covers:
- Employee theft and embezzlement
- Forgery or alteration of checks or documents
- Fraudulent electronic funds transfer
- Social engineering fraud / impersonation
- Burglary, robbery, and safe burglary
- Theft of client property (with endorsement)
What Doesn’t Crime Insurance Cover?
While Crime Insurance offers broad protection, it doesn’t cover:
- Business income loss from crime (unless endorsed)
- Cyber breach or hacking (covered under Cyber)
- Losses not discovered during the policy period
- Acts by company owners or partners
- Errors without intent to defraud
How Much Does Crime Insurance Cost?
The cost of Crime Insurance varies based on factors like business size, industry, location, and claims history.
Key Cost Factors:
- Size of company and employee count
- Financial controls and segregation of duties
- Prior fraud or loss history
- Volume of cash or funds handled
- Industry and exposure
Typical Cost Range:
- Small Businesses: $500–$2,000/year
- Midsize Firms: $2,000–$10,000/year
- Large Enterprises: $10,000–$50,000+/year
Risk Management Tips
To minimize potential claims:
- Segregate financial duties (no one person controls everything)
- Require dual approval for payments and wire transfers
- Regularly audit books and systems
- Train staff on phishing and impersonation fraud
- Implement a whistleblower program
Talk to An Expert
Our dedicated experts are ready to provide tailored insurance solutions to clients across a wide range of industries and specialized services.
Schedule a consultation to see how Alliance Risk can reduce your insurance risk.
– We look forward to partnering with you.