“It is not known how many office robberies occur every second because there is no Wikipedia entry for office robbery statistics” – Michael Scott
Why do I need crime insurance?
You’re a business.
We wish there was a fancier answer but that’s just about it.
Some businesses think that just because they don’t have a physical point of sale, they don’t need crime insurance. Others see crime insurance as overkill since their business doesn’t really handle cash and isn’t especially transactional in nature.
It’s easy to underestimate the the severity and likelihood of crimes that a business can be victimized by. It’s even easier to overlook what an insurance policy covers. But that’s why we’re here!
Maybe you do process customer transactions often. Or maybe you have ongoing relationships so you set up auto billing systems with vendors and clients. If not, paying vendors manually would likely be an employee’s job, right? It’s also possible your books are managed by just one or two people — maybe one of those people even has the power to initiate payments. Any valuables at the office? How about your employees…do they ever visit clients’ offices?
Have you at any time, or do you plan in the future to, accept cash, checks, financial instruments, wire transfers or computer funds transfers as forms of payment?
Alright…on the off-chance that none of those scenarios applied to you, here’s our last shot: do have money deposited at a bank?
Gotcha, didn’t we?
Most businesses are exposed to the risk of criminal activity. A study by insurer Great American revealed that organizations around the world lost $3.7 trillion to fraud schemes in 2014 alone. To put things in perspective, that’s just shy of Germany’s GDP in 2014.
The same study showed that businesses are likely to lose about 5% of their revenues to fraud. Last but not least, it appears small business doesn’t equal small crime: some of the larger losses were experienced by small companies.
What is it?
Crime insurance is designed to protect the company from loss caused by certain illegal activities. Unlike many other commercial insurance policies, it has little to do with defending against lawsuits from third parties. This policy instead reimburses the company itself for losses of money, securities or other tangible property that it directly experiences.
The exposures commonly addressed by these policies include:
- Employees stealing money from the company or clients.
- Inadvertently accepting forged checks or counterfeit money.
- Non-employees stealing from the company’s office or from the premises of the company’s bank.
- Robbery of valuables while in transit under the care of a messenger or armored car.
- Computer and wire transfer fraud.
Some carriers even offer risk management solutions and online portals that can help guide you on best practices for loss control at no additional cost.
While these policies are similar to fidelity bonds, not all Crime Insurance policies will comply with the ERISA’s requirements for bonding your employee benefit plans. Be sure to ask the Founder Shield team if you’re unsure of what coverage is afforded by your policy.
How do I protect my company and myself?
Want to read more on the subject? Check out our blog posts on crime insurance.
Read about other types of coverage