Commercial Crime Insurance – Who’s protecting your money?

Over the years many of us will have heard of unfortunate cases where a law firm has inadvertently transferred funds to a fraudster or where an employee has embezzled sums of money over a period of time.

You may be aware that the PII is designed to cover client money losses, so if a fraud involves the theft of a client’s funds, the Solicitors’ Professional Indemnity Insurance (PII) policy could pick this up. However, what would happen if it was the business’s money instead of a client’s?

If a theft relates to business funds, it’s likely you aren’t covered or you only have a limited amount of coverage on another insurance policy, such as an office policy or a cyber policy. These policies are unlikely to be sufficient for companies that hold significant amounts of money in their business accounts, so it may be worth considering a Commercial Crime policy.

What is covered?

Commercial Crime Insurance protects against financial losses related to a business-related crime, including employee theft, forgery, robbery, and electronic crime. While strong risk management protocols can help a business avoid fraud, dishonest employees and external fraudsters can circumvent the security of even the most well-run companies, leading to potentially substantial financial losses.

Although employees remain the greatest area of concern for organisations, a Commercial Crime policy can also cover losses caused by specific acts of non-employees, including:

• Fraudulent manipulation of the company’s computer system, including a hacker transferring funds to an outside account.
• Fraudulent electronic funds transfer instructions sent to the company’s bank purporting to be from the company.
• Theft, damage, or destruction of money, securities, and/or other property both on the insured’s premises or elsewhere (for example, while in transit).
• Forgery or alteration of negotiable instruments, including forging of the insured’s signature on business checks.
• Social engineering fraud.

Protect your policies

The consequences of any of the above crimes can be financially devastating for companies and lead to severe reputational harm, making Commercial Crime Insurance an essential part of a company’s toolkit.

Holding a separate Commercial Crime policy can also ensure that the claims experiences of other, arguably more price-sensitive policies as part of your programme such as PII, Cyber and Directors’ and Officers’ insurance, are protected.

If you are interested in a quote, we can obtain these for you upon receipt of the below information:

• Last completed fee income
• Annual wage roll
• Number of employees
• Limit(s) required

If you would like a quote or wish to discuss this in more detail, please feel free to contact us.