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Commercial Crime Insurance in Texas

Many businesses in Texas face risks resulting from employee and non-employee thefts and frauds. Sometimes this business-related crime can go unnoticed until it suddenly rips through a firm’s finances. Considering this, all types of businesses, including small, medium-sized, and large companies, should consider getting Commercial Crime Insurance. Commercial Crime Insurance provides protection from business-related crimes perpetrated by full-time or part-time employees and third parties. Businesses that do not have Commercial Crime Insurance may be at the risk of shouldering all the consequences of business-related crimes. One significant consequence is that a huge amount of money might be lost to replace the stolen property. Money could also be lost due to the inability to trade as you normally would, especially when money stolen by employees was not recovered.

A Commercial Crime Insurance policy typically provides coverage for various crimes like employee theft, forgery, embezzlement, robbery, burglary, and frauds like computer fraud and funds transfer fraud. Most individuals and businesses qualify for Commercial Crime Insurance. For instance, business owners, entrepreneurs, employers, retailers, wholesalers, gym instructors, photographers, and manufacturers are eligible for this type of policy. In addition, businesses like tech companies, restaurants, clothing stores, transport industries, grocery stores, supermarkets, gyms, convenience stores, specialty stores, department stores, hotels, or motels can get commercial crime insurance.

However, Commercial Crime Insurance excludes business crimes committed by employers or business partners. Additionally, this policy does not include financial losses resulting from accounting errors. Therefore, it is advisable to always talk to a knowledgeable and experienced Texas-licensed insurance agent to get more information regarding commercial crime coverage for your type of business.

What is Considered Commercial Crime Insurance?

Commercial crime insurance, also known as business crime insurance, is a type of insurance policy that protects businesses from crime-related losses. It covers cash, goods, merchandise, or other property loss when employees and non-employees commit robbery, fraud, theft, misrepresentation, embezzlement, forgery, or any other type of business-related crime in the company.

What is Commercial Crime Insurance for?

Commercial Crime Insurance is for protecting businesses from losses due to crime-related issues like theft, fraud, and burglary perpetrated by both employees and outside entities. For example, if one of your employees is driving the day's deposits to the bank and is robbed, a commercial crime policy would likely cover this loss.

What are the Types of Commercial Crime Insurance?

Commercial Crime insurance offers different types of coverage:

  • Employee dishonesty coverage: This coverage protects policyholders against dishonest acts like money theft or property damage by employees.

  • Forgery or alteration coverage: This coverage protects policyholders against losses that occur as a result of forgery or alteration of drafts, checks, promissory notes, or similar instruments.

  • Theft of money and securities coverage: This coverage protects policyholders against the theft, disappearance, or destruction of money or securities inside the business premises. Thefts of money or securities outside business premises can also be covered.

  • Burglary or robbery coverage: This coverage protects against loss or damage to property other than money or securities.

  • Computer and fund transfer fraud coverage: This coverage protects against losses that result from fraudulent entry or changes made to electronic data or computer programs.

Speak with a licensed commercial insurance agent to discuss commercial crime coverage types applicable to your business model.

Do you Need Commercial Crime Insurance Texas?

Yes. Every business owner needs Commercial crime insurance if they have expensive goods, equipment, lots of money or they have safes or vaults where they keep valuable items in their business premises. Businesses with security systems in place as proof of criminal activities in their workplace qualify for Criminal Crime Insurance. Also, firms that engage in transferring expensive items outside of business premises can also get this policy. Organizations that hold inventory or stock that can be stolen or are mostly involved in money transfers, credit, cash, or electronic transactions should consider getting Commercial Crime Insurance.

Commercial Crime Insurance is not mandatory in Texas, but it provides extensive protection against several crimes, including but not limited to thefts, fraud, and forgery.

Why Do you Need Commercial Crime Insurance in Texas?

According to the Texas Department of Public Safety (DPS), the total estimated value of reported properties stolen in 2020 in Texas was over $2 billion. These stolen properties included office equipment worth over $54 million. Based on this statistic, Texas business owners should consider having Commercial Crime Insurance to safeguard their company’s assets.

Commercial crime insurance is one of the most important policies to get when running a small to medium-sized business. This policy is also vital for companies that are already well-established in their industries. This is because it helps to protect their assets from losses due to employee dishonesty, theft, or fraud committed by full-time or part-time employees and third parties.

How Much Commercial Crime Insurance Do you Need?

Generally, the type of business and the industry you work in would significantly impact the amount of Commercial Crime insurance coverage you may need. However, several factors that determine the amount of Commercial Crime insurance to purchase, include:

  • Industry: Businesses in higher-risk industries tend to pay higher premiums like convenience stores, while low-risk industries enjoy lower rates.

  • Business property: If your organization stores valuable goods or keeps large amounts of cash on the business premises, there may be a greater risk for crime.

  • Annual sales: Companies with higher revenues are more exposed to many risks, which leads to higher premiums.

  • Security measures: Businesses with safety precautions like security systems and CCTV cameras can have reductions in premiums.

  • Business size: Organizations with many employees may be prone to crime like employee dishonesty or theft.

  • Coverage limits: The higher insureds’ coverage limits are, the more they may pay in premiums.

Getting the right amount of coverage for your business might be very challenging. Hence, asking a Texas-based licensed insurance agent to help get the right quote that will suit your type of business is highly recommended.

What Commercial Crime Insurance Coverage Do you Need?

The Commercial Crime insurance coverage to purchase largely depends on your needs and the type of business you run. For instance, convenience stores are often open for 24 hours, and these businesses conduct many financial transactions. In addition, they are usually located near freeway, interstate, or major street intersections. These factors may explain why convenience stores are major targets for criminal activities such as robberies and burglary - as such, obtaining Commercial Crime insurance is very important.

Another typical example of a type of business that uses this insurance coverage is Tech companies. Tech companies that deal with customer data, digital transactions, and sensitive financial information are prone to the risk of cybercrime or information theft. Therefore, it is advisable to seek help from a knowledgeable Texas-based licensed insurance agent to know how Commercial Crime insurance coverage best suits your type of business.

Is Commercial Crime Insurance Required by Law in Texas?

Commercial Crime insurance is not required by law in Texas. However, failing to get this policy could lead the business to pay for all the expenses related to any crime committed in the company, like employee thefts, shoplifting, forgery, etc. Additionally, small businesses might find it difficult to recover from thefts involving large sums of money, especially if it is difficult to recover the money from the perpetrator.

How Does Commercial Crime Insurance Work in Texas?

Businesses can have Commercial Crime insurance included in an industrial package policy, called special multi-peril insurance. This package consists of different policies that safeguard the business from loss of goods, liabilities, criminal activities, and other potential loss situations common in business operations.

Commercial Crime insurance is available because most commercial property or business policies do not cover crime-related losses. This policy can also be purchased as a standalone coverage, to add to the other insurance packages the insured might have purchased. The insureds have the liberty to specify which types of crimes they want the commercial crime policy to cover.

What Does Commercial Crime Insurance Cover?

A typical example is if an employee steals your company’s goods and sells them online, covering up the crime by fabricating the inventory count. Your criminal crime insurance will cover the forgery. Another instance of a crime that Commercial Criminal Insurance covers is if a robber comes into your business premises to steal your merchandise.

What is Commercial Crime Insurance Good for?

Commercial Crime insurance is good for protecting policyholders’ businesses from financial losses resulting from crimes such as theft, fraud, forgery, embezzlement, etc. Speak with a Texas-licensed commercial insurance agent to find out if this policy is a good fit for your business.

What Does a Typical Commercial Crime Insurance Include?

Generally, Commercial Crime Insurance provides coverage for:

  • Employee dishonesty: This policy covers workers' theft or fraudulent acts that leads to any loss or damage to money, securities, or other property.

  • Computer fraud: This covers losses or damage resulting from fraudulent practices through the use of computers.

  • Forgery or alteration: This covers fraudulent acts carried out by both staff and non-staff that involves checks or promissory notes drawn on a policyholder’s account.

  • Funds transfer fraud: Losses due to fake instructions given to a bank causing them to transfer money out of a policyholder’s account.

  • Safe burglary or robbery that takes place inside the business premises: This covers the loss of items from business premises excluding money or securities due to robbery or safe burglary committed by third-parties. Additionally, any damage to locked safe or building that occurs during this criminal action may be covered.

  • Theft of items in the business premises perpetuated by third parties: This covers loss associated with the theft or disappearance of cash or securities that are located in a company’s premises. Also coverage will be provided If the theft led to the damage of the building, any locked safe or vault.

  • Loss of items outside the business premises: This covers properties that are in transit. Any damage, theft or destruction of money, securities, or other property while in the care of staff or third-parties are covered.

  • Fake money and money orders: Losses due to fake money orders or money received by a policyholder’s business.

Business owners should speak with state-licensed insurance agents, to ensure they have adequate coverage and the right policies in place.

Who is Covered by Commercial Crime Insurance?

Commercial Crime insurance typically covers the insured. Individuals and organizations can opt for this policy. Examples of such individuals and organizations are business owners, entrepreneurs, employers, retailers, wholesalers, manufacturers, and businesses like tech companies, financial institutions excluding banks, retail stores, restaurants, etc.

What is not Covered by Commercial Crime Insurance in Texas?

Commercial Crime insurance does not cover crimes caused by employers and their business partners. Additionally, it excludes accounting errors, property damage caused by fire, and losses based on inventory records.

What Does Commercial Crime Insurance Typically Exclude?

Although Commercial Crime insurance offers comprehensive coverage for your business depending on the type of policy you have, there are many circumstances that are not included in the coverage of the policy. Commercial Crime Insurance does not provide coverage for the following:

  • Employees who the employer have known to have a history of theft

  • Theft, crimes or other criminal actions perpetuated by employers or their business partners.

  • Fraud involving warehouse receipts

  • Liability claims made by third-parties against employers due to crime-related losses

  • Accounting errors

  • Stolen property or business interruptions from crime that leads to loss of income

  • Criminal actions perpetrated by employees together with any of the employer's business partners or crimes committed by top management may also be excluded.

  • Losses resulting from data breaches or the loss of trade secrets to theft

  • Legal fees are generally excluded except for those related to forgery lawsuits due to criminal activities in the workplace

  • Inventory shortages where the records show more items than what you have on ground. Coverage can only be provided if there is a proof for the cause of the inventory shortage

  • Losses from investment or bad trading decisions are not included in this policy.

Policyholders should carefully review their policy and endorsements to know exactly what their policy may or may not cover. Alway read the exclusions section first. Also, it is important to talk to a Texas-licensed insurance agent if any questions arise regarding your policy, its coverages, or policy limits.

What is an Example of Commercial Crime Insurance?

A business owner purchased Commercial Crime insurance for her business that does check payments transactions. One day after a lot of payments were received from customers, an employee who works at the accounts department decided to forge some checks. He made the checks payable to himself and deposited it in his account. However, the business’ Commercial Crime policy was able to cover for the losses resulting from this theft.

What is the Most Common Use of Commercial Crime Insurance?

Commercial Crime Insurance is commonly used for protecting organizations from financial losses related to business-related crimes like theft by employees, robbery, forgery, and electronic crimes.

What is the Difference Between Commercial Crime Insurance and Fidelity Bond?

Although Commercial Crime insurance and Fidelity Bond are mostly used interchangeably, Commercial Crime insurance usually has broader coverage. For example, a Commercial Crime policy can help cover losses resulting from both employees and third-party while Fidelity Bonds only focus on crime-related losses perpetrated by employees. Unfortunately, this means that crimes committed by third parties like volunteers, board members who are not on salary, and strangers are not covered.

Do I Need Commercial Crime Insurance - FAQ:

Do I Need Commercial Crime Insurance if I am Self-Employed?

Yes, you do, especially if the business you are running involves crime-related risks. For instance, having Commercial Crime insurance may protect you against financial losses caused by theft, robbery, fraud, and other crimes, whether the crime was committed by an outside party or by your own employees.

Do I Need Commercial Crime Insurance if I Work from Home?

Individuals who work remotely should consider getting Commercial Crime Insurance if they have employees, clients, or other visitors who come to their homes for business purposes. Also, business-related crimes can take place in transit and online. Commercial Crime insurance will protect you against losses from equipment theft, robbery, burglary, fraud, embezzlement, forgery, and other crimes.

Do I Need Commercial Crime Insurance if I Have Commercial Property Insurance?

Individuals with Commercial Property Insurance should also consider getting Commercial Crime Insurance because Commercial Property Insurance does not cover business crimes. It only protects commercial property from hazards such as vandalism, theft, natural disaster, and fire. Hence, getting Commercial Crime Insurance protects your business against criminal activities like theft, burglary, robbery, forgery, and fraud perpetrated by employees or non-employees. This policy can also reimburse assets, cash, merchandise, and other property. If you already have commercial property insurance, it is also good to consider purchasing Commercial Crime insurance on a standalone policy or as a part of a commercial package policy.

Do I Need Commercial Crime Insurance if I Don’t Employ Anyone?

You may still need Commercial Crime insurance even if you have no employees. This is because third parties can perpetuate business crimes like robbery, burglary, theft. Hence, you need Commercial Crime insurance to protect you against criminal activities committed by non-employees.

Contact a Texas-licensed insurance agent for more information regarding the Commercial Crime insurance coverage to add to your existing policy. Also, ensure you seek advice on the best policy that works for your type of business.

When Does Commercial Crime Coverage Begin in Texas?

Texas commercial crime coverage does not require a waiting period. The insured should expect coverage immediately after purchasing the policy.

Who Can Get Commercial Crime Insurance in Texas?

Individuals and businesses can get Commercial Crime insurance in Texas. Individuals like business owners, manufacturers, retailers, wholesalers, producers are eligible for this policy. Additionally, businesses like home-based businesses, retail shops, tech companies, food companies, gyms, healthcare institutions can get commercial crime insurance.

Contact an insurance agent licensed by the Texas Department of Insurance (TDI) to know if you are eligible for Commercial Crime Insurance.

Who Qualifies for Commercial Crime Insurance?

Most small to medium-sized businesses qualify for Commercial Crime Insurance, especially those without resources to spend on security systems like CCTV cameras. Additionally, companies that handle large cash and receive payments via credit cards, checks, or online which are particularly prone to various crimes are eligible for this kind of policy. Business owners who have part-time employees, inventory, or products that can be easily taken away from the business premises should consider getting commercial crime insurance. Commercial Crime insurance is also vital for employers who allow their workers to handle financial records or customers data.

Who Needs Commercial Crime Insurance in Texas?

Every business in Texas, small or big, may need commercial crime insurance.You need Commercial Crime Insurance if you are or have the following type of businesses:

  • Tech companies

  • Finance companies like accounting firms, excluding banks

  • Cleaning businesses

  • Convenience stores

  • Drug stores

  • Wholesale stores

  • Home-based businesses

  • Food and beverage businesses

  • Healthcare institutions

  • Manufacturers

  • Employers

  • Retailers

  • Wholesalers

  • Pharmacies

  • Clothing stores

  • Advertising agencies

  • Photographers

  • Construction firms

  • Check cashing offices

  • Media agencies

  • Grocery stores

  • Supermarkets

  • Specialty stores

  • Department stores

  • Hotels or motels

  • Theaters

  • Manufacturing companies

  • Not-for-profit organizations

  • Oil and gas or mining industries

  • Agricultural companies

  • Gym and fitness studio

Who Should Get Commercial Crime Insurance?

You should get Commercial Crime Insurance in Texas if you own a small business, large business, handle financial transactions with customers, or have many employees working for you. It is important that you talk to a state-licensed insurance agent to help you understand if your business should be covered with this type of insurance.

What are the Benefits of Commercial Crime Insurance?

Generally, Commercial Crime insurance helps to protect against financial loss as a result of:

  • Employee dishonesty and theft

  • Theft, destruction or damage of money, securities, or other property committed by third parties both within and without business premises

  • Forged electronic funds transfer instructions sent to the policyholder’s bank pretending to be from the policyholder

  • Forgery or alteration of negotiable instruments or electronic fund transfers like when employees forge policyholder’s signature on business checks

  • Fraudulent manipulation of the policyholder’s computer system, including when an employee or non-employee transfers funds from the policyholder’s account

  • Receipt of fake currency by the insured

For more information on the benefits of Commercial Crime Insurance, talk to an insurance agent licensed by the Texas Department of Insurance (TDI). A licensed agent would be able to guide you through the best type of policy that will be most useful to your business.

What are the Pros and Cons of Commercial Crime Insurance

There are several advantages and disadvantages of commercial crime insurance. Although this type of policy does not cover everything about a business, it only focuses on crime-related activities. However, Commercial Crime insurance is very beneficial because it protects against crimes perpetrated by both employees and non-employees. Note that the disadvantages of this policy are not sufficient grounds to avoid purchasing it. This is because the benefits definitely outweigh its deficiencies. The following are the PROs and CONs of Commercial Crime Insurance in Texas:

PROs of Commercial Crime Insurance

There are several benefits associated with having Commercial Crime Insurance, depending on your type of business. Some of the advantages are:

  • There is flexibility in choosing the type of crime coverage you want.

  • It typically provides coverage for goods in transit and reduces the likelihood of extreme losses whenever goods are received or sent.

  • Different types of businesses can benefit from this type of insurance.

  • It covers both full-time and part-time employees and non-employees.

  • It is not restricted to employees alone, third parties are also included in the coverage.

  • Crimes that take place outside business premises are also covered.

CONs of Commercial Crime Insurance

Although many advantages come with purchasing a Commercial Crime Insurance policy, it also has its own downsides:

  • Commercial Crime Insurance policy does not cover bodily injuries sustained by employees or third parties. This is covered by Business Liability Insurance.

  • Commercial Crime Insurance policy does not include any loss that stem from a data breach. This is covered by Cyber Liability Insurance.

  • Commercial crime coverage can be quite difficult to comprehend, especially if you want to go for a comprehensive program that leaves very few gaps in coverage.

  • Criminal activities perpetuated by business partners are excluded.

Despite the above-mentioned disadvantages of having Commercial Crime Insurance, it is still good to have this policy. Ensure you find a knowledgeable and experienced commercial insurance licensed in Texas, who can assist you with putting together the right policy for your business.

Is Commercial Crime Insurance Worth Buying in Texas?

Most businesses face significant risk of inventory and financial losses resulting from criminal activities perpetrated by employees or third parties. Hence, Commercial Crime Insurance is worth buying because it covers the costs associated with criminal activities like employee theft, forgery, and embezzlement in any organization.

Consider talking to an insurance agent licensed by the Texas Department of Insurance to know if the Commercial Crime insurance coverage you intend to purchase covers the risks that are common with your business.

What Happens if you Don’t Have Commercial Crime Insurance?

If you do not have Commercial Crime Insurance, your company would not be financially protected in the event of criminal activity perpetrated by employees or third parties. For this reason, all types of businesses should consider getting this policy, especially businesses whose functionality could be at stake due to robbery or theft of expensive products.

Why is Commercial Crime Insurance Important?

It is important to get a Commercial Crime Insurance policy because it protects your financial interest in the event of criminal crimes committed by staff or non-employees. All types of businesses like accounting firms, restaurants, clothing stores, grocery stores, healthcare institutions, home-based businesses, and businesses with no employees can get this coverage. In addition, individuals like manufacturers, business owners, employers, healthcare professionals, retailers, and wholesalers can also get this policy.

One major benefit of getting Commercial Crime Insurance is that it protects business owners from financial losses associated with business crimes. This policy typically covers business crimes like thefts, fraud, forgery, embezzlement, dishonesty, and robbery. In contrast, Commercial Crime insurance excludes crimes committed by business owners, employers, and employees together with business partners. This policy does not include crimes committed by an employee who has a history of theft known to the employers and crimes resulting from accounting errors.

What Happens When your Commercial Crime Insurance Lapses?

A Commercial Crime Insurance lapse often occurs when you fail to pay premiums in time. When this happens, you may lose coverage for criminal activities perpetrated by employees or non-employees. In addition, you may risk shouldering high financial costs and not finding another carrier who is willing to offer you a policy. In the event of lapses in payment of premiums, insurance companies might give you a grace period. This is to ensure that policyholders can have the chance to reinstate their policy by satisfying certain conditions. You may be required to settle your missed payment with interest. The consequences of allowing your Commercial Crime Insurance to lapse can be devastating, so it is better to avoid it.

Contact a state-licensed insurance professional to help you clarify any questions you might have regarding Commercial Crime Insurance. Also, this Texas-based agent can also give you advice regarding how to avoid a lapse in your coverage.