Commercial Crime Insurance

Businesses, whether large or small, work with a wide network of personnel every day; and while business relationships are cultivated on trust, there are possibilities of partnerships with third parties and employees that might not pan out as well as others.

Work place fraud is a fact of business, causing losses in spite of best internal processes and controls. PWC’s Global Economic Crime and Fraud Survey 2020 indicates the total cost of crimes to be a staggering USD 42 billion. The survey also indicates that there was a roughly even split between frauds committed by internal and external perpetrators, at almost 40% each – with the rest being mostly collusion between the two.

What is covered under a Commercial Crime Insurance Policy?

The following stands covered under a commercial Crime policy :

• Loss of Money, Securities or other properties due to burglary or theft or forgery by an employee of the insured
• Loss of money due to fraudulent cheque, draft, promissory note, bill of exchange drawn on the Insured account by third party
• Loss of money, securities or property due to unlawful or fraudulently induced transfer by third party using a computer network
• Loss of money or securities due to fraudulent instructions issued to a financial institution to transfer money or securities
• Coverage is available while money/ securities/ other property are at the insured organization’s premises or in transit
• Social Engineering Frauds

Major Extensions

Some of the major extensions in the policy are :

• Audit Fees
• Investigative costs
• Interest Receivable or Payable
• Extortion
• Court attendance fees
• Credit Card Fraud
• Loss to the client of an Insured

Major Exclusions

Some of the major exclusions to the cover are as listed below :

• Prior and Pending actions/ claims
• Indirect or Consequential losses
• Fines and Penalties
• Inventory losses
• Bodily Injury and Property Damage
• Loss of Intellectual Property Rights

Since the policy wordings vary from insurer to insurer, it is necessary to understand clearly the coverage and exclusions offered in the context of business operations of a company.

*(The details furnished above are only a summary of the policy features and do not describe all the terms, conditions and exclusions in the policy. Policy finally issued upon binding the cover represents the legal contract between the insured and insurer. If you are interested to know more, please get in touch with our representative)