Businesses of all sizes face potential losses due to criminal activity. Depending on the nature, size and location of your business, your company may be vulnerable to various types of crime—from burglary to employee theft to fraud.
In addition to purchasing specialized crime (or “fidelity”) insurance, you will want to consider taking steps that prevent crimes from happening.
Preventing theft by outsiders
Taking precautions can deter criminals from targeting your business for burglary. Consider installing and maintaining:
- Strong locks and doors - External and security doors should have deadbolts and steel frames.
- Suitable lighting - Bright internal and external lights can deter would-be burglars. It’s especially important to provide strong lighting near doors and windows.
- Alarm system - This might include sensors at doors, windows and other places of entry, as well as motion detectors. Determine local regulations concerning alarms and options for a system tied to a monitoring service.
If you’re starting a business or relocating, seek out a property that already has theft-prevention features in place. In addition—especially if your business is located in a high-crime area or you keep highly valuable property on your premises—you may want to consider additional protections, such as:
- Barred windows
- Burglar-resistant glass
- Security cameras
- Private security patrols
Burglary and theft are crimes against property, but robbery involves taking property from a person via force or threat. Train employees how to respond to robberies, and minimize losses by limiting how much cash is easily accessible.
Preventing insider crimes
Insider crimes committed by employees can be highly damaging to a business. As many as 20 percent of business failures may be a result of employee dishonesty, including theft, according to the American Management Association. The Association of Certified Fraud Examiners (ACFE) estimates that businesses annually lose on average 6 percent of their revenues due to employee crime. You can help prevent insider crimes by taking the following steps:
- Increase opportunities to uncover employee theft - Implement tight accounting controls that include frequent audits and take steps to ensure employees are aware of these practices. In addition, establish a policy that enables employees to report thefts and other crimes committed by co-workers without fear of exposure or reprisal.
- Model and reward positive behavior - Emphasize the values of your business—and practice those values in how you treat customers and employees. Establish performance standards, reward loyalty and acknowledge hard work.
Increasing your protection with commercial crime insurance
Your commercial property insurance—either as an endorsement or as a component of a package policy—may provide some coverage against robbery and burglary. Crime insurance also covers two important types of property excluded by standard commercial insurance: money and securities—including destruction or disappearance as well as theft.
Standard commercial property insurance also does not cover a range of business crimes, such as fraud or embezzlement. To extend your coverage against business or “white collar” crimes, you might want to consider purchasing crime insurance. This specialized insurance includes coverage for losses resulting from:
- Employee theft
- Forgery and counterfeiting
- Embezzlement
- Computer fraud
- Wire transfer fraud
- Safe burglary