Crime

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Overview

Because crime-related losses are not typically covered by most property insurance policies, crime protection insurance is a necessary component for any business. Unfortunately, the majority of businesses don't purchase enough crime protection.

Consider that US businesses lose $400 billion each year due to employee fraud, according to a recent study by the Association of Certified Fraud Examiners (ACFE). It estimates the average business is losing six percent of its total annual revenue from losses involving employees -- on average more than $9 per day per employee.

For an organization with 100 employees, with 250 workdays in a year, this could amount to as much as $225,000 off its bottom line.

Add to this other crimes such as robbery and burglary, where small operations are especially likely to be victims, losing at least 20 times more than large corporations. In fact, shoplifting, robbery and burglary put such a disproportionate strain on small firms that many disintegrate as a result.

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What it Covers

Crime insurance and what it covers
Liabilities covered by crime insurance usually fall into two categories, although many policy's combine both types of coverage:
money and security coverage -- pays for money and securities taken by burglary, robbery, theft, disappearance and destruction.
employee dishonesty coverage -- pays for losses caused by most dishonest acts of your employees, such as embezzlement and theft

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Managing Premiums

Tips for preventing crime at the workplace

What to do if crime occurs
On average, a small-to-mid-sized company can usually purchase $100,000 in crime insurance coverage for around $1,000 in yearly premiums. Consider, though, the figures found by the ACFE, that show $225,000 estimated revenue losses per year on average for an organization with 100 employees.
How safe and claim-free your business has been in the past will affect your premium rates. The method or system your company uses to handle unethical behavior may also affect your premiums.

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Purchasing Crime Protection

To learn about crime insurance coverage available for your type of business, it is important to develop a working relationship with a qualified commercial insurance advisor. Your advisor should be familiar with the general type of business you are in and your particular operations. By working closely with your advisor, you can identify the many risks your business has, acquire the coverage you need, and protect what you are most responsible for - your business.