Date Published: July 8, 2014
Below the various coverages that are available on a commercial crime policy are explained along with examples of what would constitute a loss under each coverage.
| Coverage | Purpose | Loss Examples |
| Employee theft(This coverage is referred to as “employee dishonesty” coverage in some non-ISO forms.) | To cover theft of money, securities, or other tangible property by an employee or employees of the insured, with or without outside assistance. Theft by an employee is not covered under any of the other coverages. | Employee sets up fictitious payroll accountEmployee opens store an hour early, pockets all transactions prior to normal opening, and destroys early-morning records
Employee takes an incoming rebate check, does not record it, and takes that amount in cash, replacing the cash with the rebate check Warehouse employee sets company goods outside for his after-hours pickup |
| Forgery or alteration | To cover loss from the forgery or alteration of the insured’s checks or other written instruments of the insured instructing payment to be drawn on them (including directions for payment by an agent of the insured or purported to be drawn by such an agent) | Contractor submits voucher to bank for payment on insured’s construction loan with insured’s forged approvalThird party uses his computer to imitate insured’s checks
Third party alters insured’s legitimate check, adding a zero and increasing the payment tenfold |
| Inside the premises theft of money and securities | To cover theft of money and/or securities from inside the insured’s premises or inside the insured’s banking premises. Coverage also extends to unexplained disappearance or destruction of money and securities. | Thief burglarizes insured’s premises, stealing negotiable securitiesVandals break into insured’s premises and set fire to cashier area, burning cash on hand
Owner opens premises and finds $10,000 is missing, though nothing else seems missing or disturbed |
| Outside the premises | To cover theft of money and/or securities or robbery of “other property” while in the custody of an employee, partner, LLC member, or relative of the insured outside the premises. (Coverage also extends to unexplained disappearance or destruction of money and securities. “Other property” means tangible property that is not money or securities.) | Thief burglarizes employee’s home where company receipts are being held for morning depositRobber stops employee on the street demanding company deposits
Armed bandit stops an employee and demands the jewels he is transporting to a second store |
| Inside the premises—robbery or safe burglary of other property | To cover loss or damage to “other property” from robbery of an employee, partner, or LLC member while the property is in their custody inside the premises (excluding property in the custody of a watchman or janitor) and to cover loss or damage to “other property” from safe burglary (or attempted safe burglary) | Burglar breaks in and steals computer chips and electronic equipment from the insured’s safeEmployee is held at gunpoint in the office while thieves steal valuable paintings
Safe burglar breaks in and steals antique silverware from the safe |
| Computer fraud | To cover loss or damage to money, securities, and/or other property from the use of a computer to fraudulently transfer funds from inside the insured’s premises or the insured’s banking premises to a person or place outside those premises | Computer hacker breaks into insured’s computer system and ships the insured’s products to himselfThird-party programmer sets up default program paying a fictitious business account $1 for every $100 paid out to suppliers |
| Funds transfer fraud | To cover loss of money and/or securities from fraudulent instructions telling a financial institution to move money and/or securities from the insured’s transfer account. Fraudulent instructions include instructions given without the insured’s consent by electronic means, teletype, telegraphic means, cable, facsimile, or telephone. | Thief submits fraudulent funds transfer order to insured’s bank by telephoneThief sends fraudulent facsimile order to investment firm handling insured’s benefit plan investments, ordering funds transfer |
| Money orders and counterfeit currency | To cover loss resulting from the good-faith acceptance of counterfeit paper currency or acceptance of counterfeit money orders purported to be issued by a post office, bank, or express company | Insured accepts fake money order, which is not honored by the bankInsured accepts counterfeit $100 b |
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