Commercial Crime Insurance

We’ve all heard of commercial insurance but what is commercial crime insurance?

Commercial crime insurance is designed to protect businesses and government entities against property loss resulting from such crimes as burglary, robbery, theft, and employee dishonesty. There are many types of crimes that you can insure. Let’s take a look at some.

Burglary, safe burglary, robbery, theft, forgery, employee dishonesty, fraud, etc. These are just a few to name from a list of many. It is important to remember that your policy will not cover all of these crimes but only those that you wish to insure. Important ones to insure would be employee dishonesty, robbery and theft. If you have time, visit you local insurance agent to discuss which would be better for you to insure.

When writing the policy, there are two kinds for this type of insurance: Loss Sustained Form (Claims Made) and Discovery Form (Occurrence).

Loss sustained form or Claims Made covers losses that are sustained during the policy period and discovered either during the policy period or up to one year after the policy expires. The policy does not extend coverage beyond the policy expiration date. For example, a pet store is insured under the loss sustained version of the crime policy. The policy period is Jan 1, 2003 to Jan 1, 2004. A loss occurs on April 6, 2003 but is not discovered until Sept 7, 2004. The crime policy will cover this loss because the loss occurred during the policy period and was discovered within one year after the policy expiration date. This one year discovery period terminates immediately when the insured obtains other commercial crime insurance.

If the insured were to switch the policy from Company A (01/01/03 – 01/01/04) to Company B (01/01/04 – 01/01/05) and renews again for another year (01/01/06) and the loss that occurred in 2003 was found in 2005 instead of 2004, the loss would be covered under Company B since the claim was discovered during their policy.

Crime Insurance written on a Discovery or Occurrence basis covers lossess that are sustained at any time and discovered either during the policy period or up to 60 days after the policy expires. Simple enough to understand. If the policy was active from 01/01/08 – 01/01/09 and a claim was discovered in 05/01/08 but was sustained in 2006, the policy would cover it since it was discovered while the policy was valid. Just like loss sustained form, if the insured obtains other commercial crime insurance, the extended periods to discover losses terminate immediately.

Now that you know what commercial crime insurance is, visit you local insurance agency to find out if this coverage is right for you. You never know what kind of claim you might have to file. Remember: It’s always better to be safe than sorry.

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