Commercial Crime Insurance

Insurance for businesses against third-party claims for injury or property damage.

Commercial Crime Insurance

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What is Commercial Crime Insurance?

Commercial Crime Insurance, also known as Fidelity Insurance or simply Crime Insurance, is a type of insurance policy meant to protect business owners and commercial entities against financial losses caused by criminal activities such as burglary, robbery, theft, employee dishonesty, email spoofing, social engineering, cybercrime and other such third-party crimes.

Commercial Crime Insurance coverage can also include compensation related to defending the claims brought by third parties (which have suffered financial loss due to a cybercrime at the insured’s end), including legal fees and more. 

Who needs Commercial Crime Insurance?

Each business, irrespective of its size, location, and nature should have a Commercial Crime Insurance policy. This requirement arises not because any particular type of business is prone to a commercial crime incident but to the extent/scale to which it can be impacted.

E-mail phishing, theft, employee dishonesty, third-party fraud, forgery, social engineering, and embezzlement impact businesses of all types and sizes. Whether your employee misappropriates money from the company’s account, becomes a victim of a phishing attack or fraudulent instructions, or conspires with a third party to steal the company's assets over time, all these incidents can be considerably harmful to companies of all sizes today.

Why get Commercial Crime Insurance?

Crime Insurance is a must-have policy to make sure that you and your business are financially protected against different types of white-collar crimes.

Here are some additional advantages of buying this insurance - 

  • The Commercial Crime Policy covers the investigation expenses incurred due to a root-cause analysis of an incident to speed up the recovery process.
  • The policy also pays for legal costs incurred in defending a lawsuit filed by a client (victim) who loses money due to a cybercrime incident taking place at the insured's end. 
  • Depending upon the nature of claim, the policy may also provide coverage for the payments of interest (either receivable or payable).
  • Apart from basic protection, these plans also offer commercial crime coverage against social engineering crimes and expedite the recovery process by reimbursing for lost assets

Common Risk Scenarios for Commercial Crime Insurance 

Some of the most common risk scenarios where a Commercial Crime Policy may offer coverage include -  

  • A fraudulent fund transfer claim involving an employee transferring funds to another account via fake instructions received by a CXO
  • An accountant wiring small amounts to their account over a course of 5 years totaling to a claim of over $500K
  • An employee of the insured company falling prey to a fake email coming from a vendor for processing a payment which eventually gets credited to an incorrect account.
  • Faking signature on a cheque leaf that leads to withdrawal of funds.
  • Stealing cash while in transit from one location to another.
  • Stealing intellectual property papers and demanding a ransom in exchange.

You can easily secure Commercial Crime Coverage  with most such plans.

Major Inclusions of Commercial Crime Insurance

Crime Insurance policies may include specific scenarios to help you deal with such uncertainties. Here is a list of the major inclusions of Commercial Crime Insurance:

  • Coverage for financial losses caused by employee dishonesty and theft. 
  • Coverage for losses incurred due to computer fraud, forgery and cybercrime. 
  • Coverage for losses due to the unauthorised use of credit cards, debit cards and cheques.
  • Coverage for losses due to fraudulent transfer of money or securities. 
  • Coverage for losses due to the disappearance of money or securities. 
  • Coverage for losses due to third-party fraud or theft. 
  • Coverage for losses due to counterfeiting or piracy. 
  • Coverage for losses due to extortion and blackmail. 
  • Coverage for losses due to fraudulent advertising or product disparagement. 
  • Coverage for losses due to misappropriation of trade secrets or intellectual property.

Exclusions of Commercial Crime Insurance

When considering a Commercial Crime Insurance policy, knowing what risks it does not cover is essential. Standard exclusions of a Commercial Crime Insurance policy include: 

  • Consequential loss - Indirect loss of any kind including loss of income or interest 
  • Fines and penalties 
  • Loss or damage caused due to fire is not covered
  • Losses incurred before the policy came into effect
  • Criminal acts committed by family members or other individuals living with the insured
  • Acts committed by any member who has a major stake in the company are not covered
  • War or civil unrest, nuclear disasters, nuclear risks, terrorism, and other such incidents are usually excluded

Factors Determining Pricing of a Commercial Crime policy

Listed below are the major factors affecting the cost of Commercial Crime Insurance - 

  • Location of the business
  • Number of employees
  • Past claim experience
  • Nature of business
  • Limit of insurance sought
  • Risk management systems in place
  • Audit compliance

At Policybazaar UAE, we take pride in our world-class risk assessment capabilities and plans which enable us to craft cost-effective risk management strategies through insurance that cater to your specific requirements. We are here to provide you with the peace of mind which is crucial to safeguard your business and achieve your future objectives.

Frequently Asked Questions

Q1. What does one mean by Commercial crime insurance?

Ans: Commercial crime insurance is a type of insurance that covers companies against financial losses due to fraudulent activities such as hi-tech fraud, electronic thefts, theft of proprietary information, and more - committed by both internal staff and third parties (outside of a company's own employees). With this insurance, companies can secure financial protection against losses arising from acts of commercial crime.

Q2. What are the important coverages in Commercial crime insurance?

Ans: Commercial crime insurance covers the following criminal activities that may take place through a member of the organisation or any outside threats -

  1. Voice phishing
  2. Forgery
  3. Counterfeit currency fraud
  4. Embezzlement
  5. Counterfeit currency fraud
  6. Robbery
  7. Fund transfer
  8. Vendor fraud
  9. Online scams/computer fraud and more