Crime & Fidelity Insurance
The largest financial losses businesses suffer often come not from outside attacks — but from trusted employees. Commercial crime insurance protects against theft, forgery, fraud, and other dishonest acts, whether they come from inside or outside your organization.
Most commercial property and liability policies specifically exclude losses caused by dishonest or criminal acts.
Commercial crime insurance fills a significant gap that nearly every business has — the exclusion for employee dishonesty and fraudulent acts that appears in standard property and GL policies. Employee theft, embezzlement, forgery, computer fraud, and funds transfer fraud are excluded from most standard commercial policies — crime coverage is what protects against them.
The scale of the exposure is larger than most businesses expect. According to industry data, employee fraud and theft cause significant losses for businesses of all sizes — and the average scheme runs for 18 months before detection. The losses aren't just financial: they involve legal fees, forensic accounting costs, and significant management distraction.
Crime coverage is written on a discovery basis — meaning coverage applies to losses discovered during the policy period regardless of when they occurred. This makes the retroactive coverage period and tail provisions especially important when switching carriers.
What this coverage does for you
- Employee theft and embezzlement — the most common source of commercial crime losses
- Forgery and alteration of checks, drafts, and financial instruments
- Computer fraud and funds transfer fraud — growing rapidly
- Social engineering / impersonation fraud endorsement available
- Covers losses caused by both employees and third parties
- Defense costs included in most policy forms
What crime & fidelity insurance covers.
Crime coverage is built from individual insuring agreements — each covering a specific type of criminal loss.
Employee Theft (Fidelity)
Covers direct financial loss resulting from theft, embezzlement, or other dishonest acts committed by employees — including salaried, hourly, temporary, and leased workers. The most commonly triggered crime insuring agreement.
Forgery & Alteration
Covers losses from the forgery or alteration of checks, drafts, promissory notes, and other financial instruments — including forged endorsements on checks made out to your business.
Computer Fraud
Covers losses from the fraudulent use of a computer to transfer funds or property — including hacking-related financial theft and unauthorized computer-initiated transfers from your accounts.
Funds Transfer Fraud
Covers losses caused by fraudulent instructions to your financial institution to transfer funds — including business email compromise (BEC) schemes where a fraudster impersonates a vendor, executive, or client to redirect payments.
Theft of Money & Securities
Covers the theft of money and securities from your premises or a banking institution — including robbery, safe burglary, and disappearance of money inside the premises or in transit.
Social Engineering Fraud
Covers losses from impersonation schemes — where employees are deceived into voluntarily transferring funds or assets to a fraudster posing as a vendor, executive, or client. Often requires a specific endorsement as it's not covered under standard computer fraud insuring agreements.
Common questions.
No. Standard commercial property policies specifically exclude losses caused by employee dishonesty. Crime coverage is a separate policy — or a separate insuring agreement within a commercial crime policy — that addresses this gap. If you haven't specifically purchased employee theft coverage, you don't have it.
The terms are often used interchangeably, but fidelity bond traditionally refers specifically to employee dishonesty coverage — a bond that guarantees against employee theft. Commercial crime insurance is broader, covering multiple types of criminal loss including forgery, computer fraud, and theft of money and securities. Most modern crime policies include fidelity coverage as one of several insuring agreements.
It depends on the policy language. Standard funds transfer fraud insuring agreements cover losses from fraudulent instructions to a financial institution. BEC schemes where an employee is deceived into voluntarily sending a wire transfer may fall under social engineering fraud, which is often a separate endorsement. We'll review the specific policy language to make sure your BEC exposure is covered.
Standard employee theft insuring agreements cover employees — not independent contractors. Some policies extend coverage to contractors, temporary workers, and volunteers by endorsement. If you use contractors with access to your finances, systems, or assets, we'll make sure the policy covers that exposure.
Commercial crime policies are typically written on a discovery basis — coverage applies to losses that are discovered during the policy period, regardless of when the theft or fraud actually occurred. This is different from occurrence-based policies. The retroactive coverage date and extended discovery period provisions are important, especially at policy inception and renewal.
Protect your business from the losses no one expects.
Employee theft and fraud are more common than most business owners believe — and most standard policies don't cover them. Let's make sure you're protected.