Small businesses and entrepreneurs need to take steps to protect their investments. Crime coverage is an essential aspect of business insurance that can help protect your business from financial losses due to theft, fraud, and other criminal activities. Despite a 38% drop in the rate of breaking and entering over the past decade, it remains a prevalent property crime.
In 2021, over 125,500 incidents were reported to the police, highlighting the importance of proper protection for small businesses. This article provides a guide on protecting your small business with crime coverage and what to know to make an informed decision.
What Is Crime Coverage?
Crime coverage, also known as fidelity insurance, protects against financial losses due to criminal activities. In Canada, crime coverage can include losses from employee theft, forgery, embezzlement, and other acts. It can also include computer and funds transfer fraud. Additionally, coverage can include losses from third-party criminals.
Why Is Crime Coverage Important for Small Businesses?
Crime insurance coverage is vital for small businesses in Canada for several reasons:
- Financial protection – Small businesses are vulnerable to criminal activities such as theft, embezzlement, and forgery.
- Loss prevention – With crime insurance coverage, small businesses can implement measures to reduce the risk of criminal activities, such as installing security systems, background checks on employees, and other measures.
- Peace of mind – With crime insurance coverage, small business owners know their business is protected.
- Reputation protection – A crime incident can damage the reputation of a small business, leading to a loss of customers and income.
- Compliance with laws and regulations – Certain industries are required by law to have crime insurance coverage. For example, financial institutions must have coverage for losses resulting from employee dishonesty.
The impact of crime on small businesses cannot be overstated. Annually, crimes, including burglary, robbery, vandalism, shoplifting, employee theft, and fraud, cost companies billions of dollars. The consequences of crime can be particularly devastating for small businesses, leading to the loss of customers and employees and often resulting in changes to hours of operation, price increases, relocations, or closures.
Small businesses are particularly vulnerable to crime, as they often have limited resources to prevent and recover from financial losses. This coverage can help you recoup losses that would otherwise be difficult to recover.
What Does Crime Coverage Typically Cover?
In Canada, crime coverage typically covers losses resulting from criminal activities such as:
- Theft – Coverage includes losses resulting from theft of money, securities, and other property.
- Employee dishonesty – Coverage includes losses resulting from employee theft or embezzlement.
- Forgery and alteration – Coverage includes losses from forgeries or alterations of checks, drafts, or other financial instruments.
- Computer fraud – Coverage includes losses resulting from unauthorized access to or misusing a business’s computer system or data.
- Funds transfer fraud – Coverage includes losses resulting from unauthorized electronic funds transfers.
- Counterfeit currency – Coverage includes losses resulting from accepting counterfeit money.
- Credit card fraud – Coverage includes losses resulting from unauthorized use of credit cards.
This overview is a general idea of what crime coverage typically covers in Canada. It is important to note the specific coverage offered can vary depending on the insurance policy and the insurance company. It is advisable to review crime insurance coverage carefully to understand what is covered.
How to Choose the Right Crime Coverage for Your Small Business
When choosing crime coverage for your small business, there are several factors to consider. Here are steps to help you choose the right crime coverage:
- Assess your risk – Consider the types of criminal activities that could affect your business and the likelihood of such incidents occurring.
- Review your insurance policy – Read your insurance policy carefully to understand the coverage it provides. Look for exclusions and limitations in the policy, and ensure you know what is covered and what is not.
- Get quotes from multiple insurance companies – Get quotes from different insurance companies to compare coverage and pricing.
- Consider the reputation of the insurance company – Choose an insurance company with a good reputation for handling claims and providing excellent customer service.
- Work with a professional insurance broker – A professional insurance broker can help you find the best crime coverage for your small business and answer any questions.
- Update your coverage regularly – Review your crime coverage periodically and update it as needed to ensure it continues to meet your business’s needs.
It is essential to work with an insurance broker who understands the unique needs of small businesses and can help you find the right coverage for your business.
Types of Crime Coverage
Several types of crime coverage are available for businesses, which can be broadly categorized as follows:
- Employee dishonesty coverage protects against losses from employee theft or embezzlement.
- Money and securities coverage protects against losses from the theft of money, securities, and other property.
- Forgery and alteration coverage protects against forgeries or alterations of checks, drafts, or other financial instruments.
- Computer fraud coverage protects against unauthorized access or misuse of a business’s computer system or data.
- Funds transfer fraud coverage protects against unauthorized electronic funds transfers.
- Counterfeit currency coverage protects you from employees accidentally accepting counterfeit currency.
- Credit card fraud coverage protects against losses resulting from the unauthorized use of credit cards.
Each type of coverage protects against specific types of criminal activities. Understanding the available coverages and choosing the right policy for your business is essential.
How to Get Crime Coverage for Your Small Business
Getting crime coverage for your small business is easy. You can work with an insurance broker to find the right coverage for your business. They will help you determine the amount of coverage you need, the deductibles, and the type of coverage right for your business.
Duliban Insurance is here to help. With our extensive experience in the insurance industry, we can help you find the coverage that best fits your business’s needs.
Conclusion
In conclusion, crime coverage is a vital aspect of business insurance small business owners should not overlook. While starting and running a small business is already challenging, it becomes even more difficult if you are unprepared for the potential risks that come with it. Crime coverage protects your business from financial losses due to theft, business fraud, and other criminal activities.
It is important to note crime coverage is not just limited to small businesses. Large corporations can also benefit from this coverage, as they are vulnerable to criminal activities such as cybercrime and embezzlement. Coverage can provide peace of mind for business owners, knowing your business is protected against financial losses that may occur due to these types of criminal activities.
https://www150.statcan.gc.ca/n1/pub/85-002-x/2022001/article/00013-eng.htm
https://www.lapdonline.org/small-business-crime-prevention/
http://www.ibc.ca/ab/business/business-crime
