Commercial Crime

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A commercial crime insurance coverage offers comprehensive protection against employees’ theft and any losses from forgery, computer fraud, etc. In the event of any commercial crime, it becomes the duty of the insurance company to safeguard the policyholder against various losses or damages.

Why is commercial crime insurance coverage a must-have?

Undeniably, you can’t ignore white-collar crime which is rising at an alarming rate. Many times, companies don’t think of purchasing the cover against fraud. However, the reality is that it’s more the senior staff and trusted employees that commit fraudulent activities. And when they strike, they do it not for once but again and again over a period of time.

As a company, it becomes necessary for you to have viable financial coverage instead of wishful thinking. It is essential to get protection against such fraudulent activities. Here, a commercial crime insurance policy can play an important role.

A commercial crime insurance policy provides the following coverages :

  • Employee theft Cover

Employee theft coverage is a protection plan for loss of securities, money or other property by theft or forgery by the employee of the company.

  • Premise Cover

It includes losses from destruction, wrongful abstraction, and theft of securities or money from the policyholder’s premises by third parties.

  • Transit Cover

Transit cover provides protection for losses from disappearance, destruction of money or security outside the policyholder’s premise by a third party.

  • Depositors Forgery Coverage

It provides financial protection to the insured for losses from instruments like cheques which a third party has fraudulently drawn on account of the policyholder.

  • Computer Fraud Coverage

Computer fraud protection covers losses which a policyholder has to endure due to computer fraud made by third-party. It also covers the expenses which the policyholder has to incur due to a violation of the computer.

In most cases, a commercial crime insurance policy comes with a deductible clause which states that at the time of loss, the policyholder will have to pay a part of the claim. The insurance company would pay the remaining amount. Further, most insurance companies allow customizing commercial crime insurance policies to cover various fraud-related losses as per the company’s specific requirements.

What are additional costs covered in a commercial crime insurance policy?

The insurance policy also helps by covering the additional costs which a policyholder incurs at the time of loss or damage. For instance, after the commercial crime, the policyholder may require a temporary replacement of equipment or temporary workforce or office space. In this case, the insured may incur additional expenses on transporting of documents or equipment. Here, the insurance company may pay the additional cost along with the cost incurred in bringing the external workforce on board.

Case Study – Benefit of having a Commercial Crime Insurance Policy

K.S Automobile Spare Parts is situated in Pune. Backed with over 100 employees, the company had a huge clientele base both in India and abroad. Last year, the company got a big contract of exporting spare parts worth Rs 2 crore to a Dubai-based buyer. Considering the quantum of the order, employees were working double shifts.

One day, a worker named Kishore was working in night shift. During the break when a few employees were outside the site. Kishore took undue advantage and stole ten packets of spare parts which were part of an export order.

However, CCTV had captured Kishore’s crime. Though the company recovered the packets of spare parts; they were in bad condition.

Read more: What Is the Application of Commercial Crime Insurance?

The act of Kishore caused heavy losses to K.S Automobile. The company had to employ extra employees to manufacture the remaining spare parts. It was an additional cost that the company had incurred. The entire incident made the management of K.S Automobile think about what could have been done to avoid the situation.


The situation would have been different if K.S Automobile had commercial crime insurance. The insurer would have come forward to cover the losses which the company had to incur due to theft committed by its employee. Further, as K.S Automobile had to pay extra to get an additional workforce, the cost associated with it would have been covered by the insurance company as well.