Crime Insurance

Example

“After discovering that a trusted bookkeeper had embezzled $50,000 over two years, the accounting firm was grateful their crime insurance policy covered employee dishonesty losses.”

Memory Tip

Crime insurance Covers losses from Criminal acts - it's your shield against Crooks who want to steal your Cash.

Why It Matters

Crime insurance protects businesses from potentially devastating financial losses due to criminal activity, which standard property insurance typically excludes. Without this coverage, businesses bear the full cost of theft, fraud, and employee dishonesty, which can threaten their survival.

Common Misconception

Many business owners assume their general liability or property insurance covers criminal acts, or they believe crime only happens to other businesses in different industries. In reality, most standard business policies exclude criminal acts, and businesses of all types and sizes can be targets.

In Practice

A retail electronics store purchases crime insurance with $100,000 coverage for employee dishonesty and $250,000 for theft of merchandise. During a break-in, thieves steal $75,000 worth of inventory, and the investigation reveals a manager had been stealing an additional $25,000 over six months. The crime insurance pays the full $100,000 in losses ($75,000 for burglary + $25,000 for employee theft) minus the $5,000 deductible, providing the business with $95,000 to recover from these criminal acts.

Etymology

Developed in the late 19th and early 20th centuries as businesses grew larger and more vulnerable to various criminal activities, evolving from basic theft coverage to comprehensive crime protection packages.

Common Misspellings

Related Terms

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