Risk & Business Magazine Hardenbergh Insurance Group Magazine Summer 2018 | Page 28

CRIME INSURANCE Crime Insurance: It’s More Than You Think It Is BY JOE HAGGERTY W hen business owners think of commercial insurance, they often think of property insurance that covers their possessions after a fire or liability insurance that covers them when someone sues after a slip-and-fall accident on a patch of ice. Maybe they think of workers’ compensation after an employee gets hurt on the job or automobile insurance when someone rear-ends their delivery truck. However, a topic that is less frequently thought of in commercial insurance is crime insurance. When I say crime insurance, I am talking about coverage that encompasses losses due to fraudulent, dishonest, or criminal acts. Coverage for losses of this nature can be secured through the commercial crime coverage form. All too often, business owners realize the importance of purchasing this coverage form—along with the correct insuring agreements— only after they sustain an uncovered loss or realize the limits that they have in place (often times provided by a property- broadening endorsement) are woefully inadequate. TRADITIONAL CRIME INSURANCE WAS DESIGNED TO PROTECT INSURED COMPANIES FROM SOURCES OF LOSS SUCH AS EMPLOYEE DISHONESTY, FORGERY OR ALTERATION, OR THEFT OF MONEY AND SECURITIES. 28 Traditional crime insurance was designed to protect insured companies from sources of loss such as employee dishonesty, forgery or alteration, or theft of money and securities. All of these causes of loss deal with the physical theft of company funds or the physical forgery or alteration of company documents with the intent to steal company funds. These causes of loss do not provide coverage for losses resulting from the fraudulent use of a computer to transfer funds or for the losses incurred when a financial institution receives fraudulent instructions directing them to transfer, pay, or deliver funds. This represents a major coverage gap in the insurance programs of many commercial insureds. Even those businesses that have purchased a Cyber Liability policy may find that their policy does not provide the necessary first-party coverage to address this specific exposure. Fortunately, in recent years additional