One trusted employee. Over $1,000,000 gone. And almost no coverage left to recover it.
That’s not a hypothetical — it’s a real claim our team at Mason-McBride handled for one of our clients. The client’s Office Manager had been embezzling from the company for years. When the insurance carrier investigated, they discovered something even more alarming: the Office Manager had deliberately stopped paying the business insurance premiums, causing nearly every policy to lapse for non-payment.
The one policy she kept active? The commercial crime insurance policy.
The carrier completed its investigation within eight months and paid the full $1,000,000. The annual premium had been $1,700.
What is Commercial Crime Insurance?
Many business owners assume their standard commercial property policy covers criminal acts. It typically doesn’t. Commercial crime insurance is designed to protect businesses from financial losses related to:
- Employee theft and embezzlement
- Fraud and forgery
- Robbery and burglary
- Computer fraud and electronic theft
- Social engineering fraud
- Counterfeit currency
- Fraudulent wire transfer instructions
- Hacker-initiated fund transfers
What Commercial Crime Insurance Does NOT Cover
It’s equally important to understand the gaps. Crime insurance generally does not cover:
- Losses based solely on inventory records
- Losses involving employees after the business becomes aware of prior criminal acts by that employee
- Indirect or consequential losses such as business interruption or lost income
- Legal expenses
- Data theft — including trade secrets, client lists, or intellectual property
- Property damage caused by fire
- Fines and penalties
- Salary, commission, or bonus-related losses
ERISA Fidelity Bond Requirements
Under the Employee Retirement Income Security Act of 1974 (ERISA), individuals responsible for handling funds in a qualified employee benefit plan must be bonded. A commercial crime policy often includes this mandatory coverage, helping businesses comply with federal regulations.
Why This Coverage Matters
A single criminal act, especially one from inside your organization, can cause financial harm that a business never fully recovers from. Standard commercial policies weren’t built to cover these exposures.
If you haven’t reviewed your crime coverage recently, now is a good time to start that conversation.
Ready to Protect your Business?
Find out how Mason-McBride can help protect your business and request a proposal.
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