Commercial Crime Insurance - Tooher-Ferraris

Commercial Crime Insurance | Fidelity Insurance

Comprehensive Protection for Businesses of All Sizes

No business is immune to crime. The costs of employee theft, cyber fraud, third-party fraud, and other criminal acts can be staggering, often leading to financial instability or even closure. Commercial Crime Insurance, otherwise known as fidelity insurance, provides a safety net, covering losses that would otherwise be a severe financial burden.

Who Should Consider This Coverage?

Small and medium-sized businesses
Companies with large inventories or cash flow
Organizations handling sensitive financial data
Businesses reliant on third-party vendors

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Key Coverage Areas:

Employee Dishonesty

Coverage for theft, embezzlement, or other fraudulent acts committed by employees.

Forgery or Alteration

Protection against losses due to forgery or alteration of checks, drafts, or other financial instruments.

Cyber Fraud

Coverage for losses resulting from cybercrime, including phishing, hacking, and other cyber-related frauds.

Third-Party Fraud

Protection against fraudulent acts committed by third parties, including vendors, customers, and other external entities.

What’s Typically Not Covered?

While Commercial Crime Insurance provides vital protection against losses caused by employee dishonesty, there are specific exclusions and limitations that vary by policy. Here are common risks and situations typically not covered:

Theft or fraud committed by third parties, such as customers, vendors, or external hackers, is not usually covered unless the policy explicitly includes third-party crime coverage.
Losses caused by the fraudulent or dishonest actions of business owners, executives, or partners are excluded unless the individual is explicitly covered under the policy.
Claims for losses discovered after the policy has lapsed or was canceled are typically not covered unless a discovery period extension is purchased.
Losses that occur as a result of employee dishonesty but are indirect in nature, such as reputational damage or lost business opportunities, are excluded.
Theft or misuse of intangible assets, such as intellectual property, trade secrets, or confidential information, is generally not covered.
Fines, penalties, or punitive damages imposed on the company due to the actions of an employee are excluded.
Losses arising from mistakes, errors, or negligence in bookkeeping or accounting are typically not covered unless fraud is involved.
Financial losses resulting from unauthorized or speculative trading by employees are often excluded unless specifically endorsed in the policy.
Losses due to cybercrimes, such as phishing attacks or ransomware, may not be covered unless the policy includes specific computer fraud or cybercrime endorsements.
Losses that can only be proven by an inventory count or profit-and-loss statement, without definitive evidence of theft or fraud, are usually excluded.
Financial losses due to government seizure of property or assets resulting from criminal investigations are not covered.
Losses caused by fraudulent acts committed before the policy period began are excluded unless prior acts coverage is included.

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Differentiating Your Risk

During the application process, insureds must demonstrate they are a good risk by maintaining a clean loss history or showing corrective actions for past losses. Underwriters favor applicants with:

Clean, audited financial statements.
A reputable external auditor.
Stable financial performance, exceeding industry peers.
Strong internal controls, including segregation of duties, vendor management, and independent audits.
Robust funds transfer controls.
A whistleblower hotline or mailbox.

These traits signal a commitment to mitigating risks and maintaining operational integrity.

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Frequently Asked Questions (FAQs)

What is Commercial Crime Insurance?

Commercial Crime Insurance protects businesses from financial losses resulting from various criminal acts, including employee theft, fraud, and cybercrime.

Who needs Commercial Crime Insurance?

Any business, regardless of size or industry, can benefit from Commercial Crime Insurance. Companies with significant financial transactions, sensitive data, or valuable assets are particularly vulnerable to crime.

What does Commercial Crime Insurance cover?

It covers a range of risks, including employee dishonesty, forgery, alteration of financial instruments, cyber fraud, and third-party fraud.

How is the cost of Commercial Crime Insurance determined?

The cost is based on several factors, including the size of your business, the industry you operate in, the specific risks you face, and your claims history.

How can I reduce the risk of commercial crime in my business?

Implementing strong internal controls, conducting regular audits, training employees on fraud prevention, and working with an experienced insurance provider like Tooher-Ferraris can help mitigate risks.

Protect Your Business with Tooher-Ferraris

Commercial crime poses a significant threat to businesses, but with the right protection, you can safeguard your financial stability and continue to grow confidently. Tooher-Ferraris Insurance Group offers tailored Commercial Crime Insurance solutions designed to meet your unique needs. With over 90 years of experience, you can trust us to provide the comprehensive coverage and expert guidance you need to protect your business from financial loss.

Contact Tooher-Ferraris today to learn more about how we can help you protect your business from commercial crime.

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