Crime can take many forms inside a business. It can come from an employee who manipulates invoices, a vendor who forges payment instructions, or a scammer who tricks someone into wiring money to a fake account. Crime Insurance helps protect against these losses by reimbursing direct financial damage from theft, fraud, or forgery.

This guide explains what Crime Insurance typically covers, how those coverages apply to real-world situations, and a few limits to keep in mind when building a protection plan.

Why Businesses Need Crime Insurance

Financial crime affects businesses of all sizes. Even well-run companies face risks from internal and external threats. According to the Association of Certified Fraud Examiners, organizations lose an estimated five percent of their revenue to fraud each year, with median losses reaching six figures. Many cases go undetected for months, allowing damage to compound over time.

Business Property Insurance or Liability Insurance usually excludes this kind of loss. Those policies focus on physical damage or third-party injury, not stolen funds or digital fraud. Crime Insurance fills that gap by covering direct, intentional acts that result in financial harm.

What Crime Insurance Covers

Crime Insurance typically protects your business from multiple forms of theft and deception, whether caused by employees, third parties, or external criminals. Below are the most common coverage areas.

• Employee theft and dishonesty. Covers loss of money, securities, or property caused by an employee’s fraudulent or dishonest act. Examples include embezzlement, payroll diversion, or falsified expense reports.
• Forgery and alteration. Protects against losses from forged checks, drafts, or promissory notes made in your business’s name. For example, a stolen checkbook is used to create counterfeit checks drawn on your company’s account.
• Computer and funds-transfer fraud. Covers money stolen electronically through hacking or unauthorized wire transfers. For example, a criminal gains access to your online banking credentials and transfers funds out of your account.
• Robbery, burglary, or theft of property. Provides protection for money, securities, or property stolen from your premises or while in transit. For example, cash is taken from a company safe during a break-in, or a deposit is stolen en route to the bank.
• Client coverage. Covers loss to a client’s funds or property caused by your employee’s theft or fraud. For example, a bookkeeper misappropriates client funds while managing their account on your behalf.
• Counterfeit currency and credit-card fraud. Covers losses due to accepting counterfeit money or fraudulent credit-card transactions. For example, your business unknowingly deposits counterfeit bills or processes payments using stolen card data.

Crime Insurance Endorsements and Add-Ons

Many Crime Insurance policies allow businesses to customize coverage through endorsements that extend protection beyond the base policy. These are particularly valuable for modern companies that handle digital payments, work with third parties, or operate at scale.

• Social-engineering fraud. Protects against deception-based crimes, such as phishing or business email compromise scams. For example, a finance employee receives what appears to be a legitimate email from a vendor and sends payment to a fraudulent account.
• Third-party or vendor theft. Covers losses caused by contractors, vendors, or service providers who are not direct employees but have access to company funds or systems.
  For example, a consultant with temporary account access steals client deposits.
• Funds in transit. Extends protection for cash, checks, or securities that are stolen while being transported to or from your business location. For example, a courier is robbed while delivering a bank deposit.
• Investigative expense coverage. Reimburses costs associated with uncovering or documenting a covered crime, including forensic accounting or legal assistance.
• Client or customer extension. Adds protection for client-owned property or funds handled under your control, even when no formal fiduciary relationship exists.

Crime Insurance Claims Examples

When a potential loss occurs, the insurer must confirm that a covered criminal act caused a direct financial loss. Once validated, reimbursement is issued up to the policy limit, minus the deductible. Here are a few real-world scenarios that illustrate how coverage applies:

• An operations manager falsifies invoices and diverts payments over six months. The business files a claim under the employee-theft provision to recover the total amount stolen.
• A hacker uses stolen credentials to transfer funds from a corporate account. The company files under the computer fraud or funds transfer section.
• A finance employee is tricked into wiring money to a fraudulent vendor. If the company added a social-engineering endorsement, the loss may be covered up to that endorsement’s sublimit.

What Crime Insurance Does Not Cover

Even robust Crime Insurance has limits. Understanding what isn’t covered helps you fill potential gaps with other forms of protection. Key exclusions typically include:

• Crimes committed by owners or senior executives. Most policies exclude theft or fraud by company principals or controlling officers. This risk is better addressed by Directors and Officers (D&O) Insurance, which covers claims of mismanagement or breach of fiduciary duty and not deliberate theft.
• Known dishonest employees. Losses from employees previously caught stealing or committing fraud are excluded. Strong internal controls and immediate termination are essential for prevention.
• Accounting errors and business mistakes. Crime Insurance doesn’t cover losses from bookkeeping errors, mismanagement, or contract disputes. These may fall under Errors and Omissions (E&O) Insurance, which protects against professional negligence.
• Data breaches and cyber incidents. Crime Insurance focuses on stolen money, not compromised data or ransomware. Those exposures are handled under Cyber Insurance, which covers privacy breaches and data restoration.
• Indirect losses. Reputational harm, lost profits, and legal expenses to prosecute offenders are not covered. Some of these may be recoverable through Business Interruption Coverage or Management Liability Insurance.
• Acts of war or government seizure. These events are broadly excluded from most policies. International businesses may consider Political Risk Insurance for such scenarios.

For most companies, Crime Insurance works best as part of a coordinated risk program that includes Cyber, D&O, and Liability Insurance. Together, these create a more complete safety net.

Tailoring Crime Insurance to Your Business

The right coverage depends on your unique financial workflows, employee structure, and exposure levels. When determining how much protection to carry, consider:

• How many employees handle money or approve payments
• The size and frequency of financial transactions
• Vendor relationships and third-party access
• The strength of your internal controls

Modern brokers like Vouch make this process simpler. Through one digital platform, you can assess exposure, receive expert guidance, and build tailored coverage that evolves as your business grows.

Why Crime Insurance Matters

Financial crime remains one of the hardest risks to predict or prevent. Crime Insurance gives businesses peace of mind by covering direct losses from theft, fraud, or deception, both inside and outside the company.

With a tailored policy in place, your company can operate confidently, knowing its financial foundation is protected. Vouch helps ambitious businesses combine Crime, Cyber, D&O, and other key coverages in one streamlined platform so you can focus on growth, not worry.

Frequently Asked Questions

What types of crime does Crime Insurance cover?

Crime Insurance covers intentional acts that result in direct financial loss to a business. This includes employee theft, forgery, computer or wire-transfer fraud, robbery, burglary, and certain vendor or third-party thefts if covered by endorsement.

Does Crime Insurance cover cyberattacks or data breaches?

No. Crime Insurance covers stolen funds and physical property, not stolen data or damaged systems. Data breaches and ransomware attacks fall under Cyber Insurance, which is designed for privacy and technology-related incidents.

Is social-engineering fraud automatically covered?

Usually not. Social-engineering fraud, such as phishing or business email compromise scams, is often added through an optional endorsement. Businesses that regularly handle digital transactions should confirm whether this coverage is included in their policy.

Can Crime Insurance cover theft by contractors or vendors?

Standard crime policies focus on employee acts, but many insurers offer endorsements for third-party theft. This add-on can protect your business if an outside service provider or consultant steals money or assets.

Does Crime Insurance cover client losses?

Yes, if the policy includes a client-coverage provision or endorsement. This protects client funds or property that your company handles, in case an employee commits theft or fraud affecting a client.

What if a crime isn’t discovered right away?

Crime Insurance typically covers losses discovered during the policy period or within a defined discovery window after expiration. Because fraud can go unnoticed for months, it’s important to review how your policy defines “discovery.”

How does Crime Insurance differ from a fidelity bond?

A fidelity bond is a narrower form of protection that primarily covers employee dishonesty. Crime Insurance offers broader coverage, including external theft, forgery, and fraud, and can be customized with endorsements to fit your risk profile.

How often should I review my crime coverage?

Once a year at minimum, or after major operational changes such as new systems, added staff, or higher transaction volume. Coverage needs can shift quickly as a business grows.

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.