The last thing a businessowner wants is to face something like theft. Theft by strangers, by employees or by partners can be messy and expensive to fix. If you are worried about possibly having your business’ money or property stolen, it’s important to understand the coverage limits of your business owners policy.
Property Theft Coverage
Besides general liability coverage, a basic businessowners policy includes commercial property insurance, which covers:
• Fire
• Smoke
• Burst pipes
• Explosions
• Vandalism
• Theft
Under this type of coverage, theft refers to the stealing of physical property owned by the insured business. There are limits to this coverage. Property/contents coverage will not compensate for physical money, billion, securities, vehicles or signs not attached to the building.
Incidents that this coverage does not cover include:
• Employee Dishonesty
• Normal Wear and Tear
• Power Failure
• Computer Software/Hardware Failure
• Burglary/Robbery (theft by force)
As you can see, your property insurance under your BOP has limits when it comes to theft. Thankfully, you can add coverages to cover some of the gaps.
Employee Theft Coverage
Although you vet your employees carefully and would like to think that your team would never steal, things happen. Basic property insurance won’t provide compensation if an employee steals from the business. Crime coverage, also known as employee dishonesty coverage, provides compensation if an employee or group of employees steals from the business/commits fraud. It covers against theft of property, merchandise and cash as well as embezzlement and forgery.
You can add this coverage to your BOP to enhance your theft coverage.
Optional Coverages that Cover Theft
There are other coverages that include theft that may be added to your BOP or purchased as a separate policy.
• Commercial Auto Insurance: If your business frequently uses vehicles to transport products or equipment, it’s important to keep the work vehicles safe. Comprehensive coverage includes theft, even if the theft is committed by an employee.
• Inland Marine Insurance: Products and equipment in transport aren’t often covered by commercial auto insurance. Inland marine insurance provides compensation for damage or loss of products and equipment due to fire, storms, vandalism and theft.
• Cyber Insurance: Not everything that can be stolen is physical. Most companies store a great deal of information online, leaving themselves open to cyber-attacks. Cyber attacks occur when a hacker breaks through your company’s firewalls and damages, destroys or steals data. Cyber insurance provides compensation for stolen electronic data. It can also cover cyber extortion.
How Much Does Commercial Theft Insurance Cost?
The cost of theft coverage depends on the type of insurance and what is being insured. Expensive items or equipment will cost more to insure. The average cost of commercial auto insurance with comprehensive coverage is between $750 and $1,200 a year per vehicle. On its own, crime insurance can cost anywhere between $240 and $4,000.
There are many factors that go into these numbers:
• Location
• Claims history of the business
• Credit score of the insured
• Driving records (for commercial auto insurance)
• Replacement value of insured items
In general, these policies don’t cover robbery or burglary. Unlike theft, burglaries and robberies are committed through force. You may purchase separate Robbery and Safe Burglary Coverage. This is especially important for businesses that carry large amounts of money within their properties, such as banks, grocery stores and gas stations.
The best way to prepare for theft is prevention. Invest in safety practices and anti-theft systems for your business’ vehicles and locations and be sure all employees know what to do in case of an attempted robbery or other emergency. Review your BOP to make sure you have the coverage you need.