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13.0 Commercial Crime Coverage & Bonds

Learning Objectives​

Upon completing this chapter, you should be able to:

  1. Define burglary, robbery, theft, and mysterious disappearance
  2. Distinguish among the different Commercial Crime coverage forms
  3. Apply the coverage provided by the eight primary Insuring Agreements
  4. Identify other available Commercial Crime insurance coverages
  5. Identify the three parties involved in fidelity bonds and surety bonds

Overview​

Commercial Crime insurance protects businesses and other organizations against financial losses resulting from burglary, robbery, or theft of money, securities, and other property. The insured may select from several coverage options designed to address common crime exposures, including employee dishonesty, forgery or alteration, burglary of safes or vaults, computer fraud, funds transfer fraud, and acceptance of counterfeit currency.

This chapter explains important Commercial Crime insurance definitions and reviews the principal Insuring Agreement options available to protect an organization against crime-related losses. Commercial Crime coverage may be written as a stand-alone policy or added as a coverage part to a Commercial Package Policy (CPP). Commercial Crime policies are subject to their own coverage conditions as well as the Common Policy Conditions discussed in Chapter 9. When Commercial Crime coverage is included in a CPP, it is also subject to the Common Policy Declarations and a separate Commercial Crime Declarations page.

This chapter also examines several types of bonds used to protect against specific financial risks. Fidelity bonds protect employers against losses caused by employee dishonesty. Surety bonds protect parties when a person or organization fails to perform a contractual, legal, or other required obligation.

An Insurance Story

Like most retail businesses, The Furniture Company faces several crime-related exposures. Merchandise could be stolen from the showroom, a customer could use counterfeit money to make a purchase, or an employee could steal money or property from the business. Although the Causes of Loss—Special Form may provide limited protection against certain theft losses, a Commercial Crime coverage part offers broader protection for many common criminal acts. This coverage is especially important for losses caused by employee dishonesty, which are generally excluded under other commercial coverage parts.