You’ve done the foundational work — assembled a team, secured capital, started scaling. But even with the right structures in place, crime can still cause serious damage. Whether it’s wire fraud, forgery, or internal theft, these aren’t hypotheticals. They happen more often than you might think.

Each year, U.S. businesses lose roughly $50 billion to employee theft. Nearly 70% of those cases occur at small and midsize companies, with a median loss close to $290,000 per incident. Bigger companies lose even more, averaging over $1.13 million per event. What makes these numbers even more sobering is that standard insurance policies often don’t apply. That’s where Crime Insurance steps in.

What is Crime Insurance?

Crime Insurance covers financial losses caused by dishonest acts. This includes fraud committed by employees, vendors, or other third parties — situations that usually fall outside General Liability or Business Property policies. Crime Insurance can help recover funds lost to theft, embezzlement, forgery, and fraudulent wire transfers.

This isn’t just meant to protect your bank account, it can also help to defend your brand, your leadership, and your relationships — because once trust is broken, the effects extend far beyond the balance sheet.

This is especially true for companies in certain sectors. Fintech, investment, and financial services companies, for example, tend to face more sophisticated fraud attempts. If your business deals with transactions, banking data, or regulatory oversight, your risk is elevated. 

But it’s not limited to those industries; any company with distributed teams or limited internal audit processes could be at risk especially with the rise in remote work and asynchronous communication.

What does Crime Insurance cover?

Crime insurance helps protect your business against losses from dishonest acts like theft, fraud, or embezzlement. It covers incidents like:

• Employee theft or embezzlement. If an employee steals money, securities, or property.
• Third-party theft. Losses caused by vendors or others outside your team.
• Forgery & alteration. Protection if someone forges checks, promissory notes, or alters payment instructions.
• Funds transfer fraud. When criminals trick your bank or team into wiring money to the wrong place.
• Computer fraud. Losses from hacks, malware, or other digital tricks that move money out of your accounts.

First-party vs third-party Crime coverage

As you explore coverage, you’ll encounter two main types of protection: First-party and Third-party Crime coverage.

First-party Crime Insurance

First-part coverage shields your company from losses due to internal actors, like an employee who siphons money from your business account. It is the more common scenario. It’s especially important if you have financial systems accessible to multiple team members.

Third-party Crime Insurance

Third-party coverage protects you if someone connected to your business — say, a contractor or vendor — commits fraud that impacts your customer. If your startup handles sensitive data, contracts with vendors, or enables direct customer interaction through software or services, third-party coverage is worth serious consideration. 

What Crime Insurance doesn’t cover

While Crime Insurance covers a wide range of financial threats, there are specific exclusions you should be aware of, especially as your business grows and evolves.

• Data breaches. Losses that result from a data breach, or any incident involving the compromise or exposure of personal or company data, fall under the scope of Cyber Insurance. 
• Digital assets. Crime Insurance won’t cover the loss of digital assets like cryptocurrency. If your company works with digital tokens or other blockchain-based assets, you’ll need coverage that addresses those unique risks.
• Leadership. Crimes committed by your leadership team are also excluded. If someone with a controlling interest in your company commits fraud, it falls outside the bounds of what your policy will cover. The same applies to any theft committed by partners, officers, or LLC members.
• Forgery. Your policy will cover forgery when someone signs another person’s name with the intent to deceive. But it won’t cover scenarios where someone signs their own name in an unauthorized or misleading way. This distinction matters, particularly in fast-moving startup environments where authority lines can blur. 
• Contractors. If a contractor causes a loss, Crime Insurance likely won’t cover it by default. Contractors typically aren’t included in the definition of “employee” under most policies. If your business relies on third-party developers or engineering support, some endorsements can extend your crime policy to cover certain acts committed by software contractors. 
• Indirect loss. Crime insurance won’t reimburse you for missed revenue, lost opportunities, or the reputational damage that can follow a financial crime. It’s designed to recoup specific, documented financial loss, not projected earnings or hypothetical outcomes.

How Crime Insurance complements your other insurance policies

To protect your company’s finances and reputation, it's important to understand how Crime Insurance works alongside your other coverages. 

General Liability

General Liability Insurance focuses on physical incidents. It protects you from claims involving bodily harm or property damage caused by your business operations. That might include someone getting injured at your office or damage caused by your team at a client site.

Business Property

Business Property Insurance covers damage to your physical assets. That includes things like your office furniture, computers, or inventory in the event of fire, theft, or vandalism. It’s useful for rebuilding after a break-in or replacing equipment after a natural disaster.

Cyber

Cyber Insurance focuses on threats tied to data and systems. It covers breaches, hacks, ransomware events, and privacy violations. If a criminal infiltrates your network and leaks sensitive customer data, your cyber policy is built to respond.

Directors & Officers (D&O)

Directors & Officers (D&O) Insurance protects your leadership team. It covers claims made against individual executives or board members for alleged mismanagement, regulatory violations, or fiduciary breaches. If an investor sues over a strategic decision, D&O is the coverage that applies.

Errors & Omissions (E&O)

Errors & Omissions (E&O) Insurance is designed for professional mistakes. It applies when a service you provide leads to a financial loss for a client, such as a coding error or missed deadline. If you’re sued for negligence or breach of contract, this coverage responds.

Fiduciary Liability

Fiduciary Liability coverage applies if you manage employee benefits like a retirement plan. It protects you from claims that you mismanaged those plans, such as failing to monitor a 401(k) provider or making imprudent investment choices.

When you should consider adding Crime Insurance

If you’re managing financial transactions, data, or customer relationships, you’re at risk. Certain moments are especially good times to evaluate Crime coverage:

• You’ve just raised funding.
• You’re hiring your first employee.
• You’re onboarding new vendors or partners.
• You’re preparing to launch a product that processes payments or sensitive data.

These transitions often mean you’re handling more money, more responsibility, and more opportunity for bad actors to find a weakness. Adding or updating your crime policy during these phases can reduce exposure and build long-term resilience.

When evaluating plans, look for options that cover employee theft, fraud, and forgery. If your operations include vendor access or digital platforms, make sure third-party incidents are also covered.

Need help getting Crime Insurance? Get a free coverage recommendation or get a quote today.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.