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.
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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