Commercial Crime Insurance Policy - Coverage, Benefits and Exclusions

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Contents
  1. What Is Commercial Crime Insurance Policy: Coverage, Benefits and Exclusions
  2. What is a Commercial Crime Insurance Policy?
  3. What is the need for a Commercial Crime Insurance Policy?
  4. What does a Commercial Crime Insurance Policy Cover?
  5. Employee Theft Coverage
  6. Premises Coverage
  7. Transit Coverage
  8. Depositors Forgery Coverage
  9. Counterfeit Currency
  10. Electronic Fraud
  11. What are the Add-On Covers under a Commercial Crime Insurance Policy?
  12. What is The Cost of a Commercial Crime Insurance Policy?
  13. What is not Covered Under Commercial Crime Insurance Policy?
  14. Is Social Engineering Fraud Covered under a Commercial Crime Insurance Policy?
  15. Example of Commercial Crime Insurance Policy Claim
  16. Case Study: XYZ Corporation
  17. Get best Quotes for Commercial Crime Insurance Policy with Qian!
  18. Testimonials

What Is Commercial Crime Insurance Policy: Coverage, Benefits and Exclusions

What is a Commercial Crime Insurance Policy?

A Commercial Crime Insurance Policy offers comprehensive protection against loss of money, securities or property caused by Theft, Burglary, Fraud or Forgery by an Employee of the Insured Company acting alone or in Collusion with others.
A Commercial Crime Insurance Policy basically provides coverage for crimes such as forgery, dishonest acts, fraudulent funds transfer, computer frauds, stealing of password for unauthorised access, receipt of counterfeit currency etc.

What Is Commercial Crime Insurance Policy: Coverage, Benefits and Exclusions

What is the need for a Commercial Crime Insurance Policy?

Employees have access to a company's internal records, data and are also aware of the loopholes in the company's systems. Thefts, Frauds and Forgeries by employees remain a concern for Companies with potential for huge losses. Robust Internal Control measures helps in mitigating such a risk, but there is a need for loss protection when a loss happens. This is where a Commercial Crime Insurance Policy comes into play, by providing compensation for such frauds.

What does a Commercial Crime Insurance Policy Cover?

A Commercial Crime Insurance Policy provides the following coverages:

Employee Theft Coverage

A Commercial Crime Insurance Policy provides compensation for direct losses of Money, Securities or Other Property Caused by Theft or Forgery by any Identifiable Employee of the Insured Company acting alone or in collusion with others.

Premises Coverage

A Commercial Crime Insurance Policy provides compensation for direct losses caused by the actual destruction, disappearance, wrongful abstraction or Computer Theft of Money or Securities within or from the Premises, Banking Premises or night depository chute or safe maintained by any bank or trust company.
Coverage under this Insuring Clause also include:

  1. loss of or damage to other property by Robbery or attempt thereat within the Premises,
  2. loss of or damage to such property contained within any safe which results from Safe Burglary or attempt thereat within the Premises,
  3. damage to a locked safe, cash drawer, cash box or cash register within the Premises by felonious entry or attempt thereat or loss by felonious abstraction of such container from within the Premises; and
  4. damage to the Premises resulting from such Safe Burglary or Robbery

Transit Coverage

A Commercial Crime Insurance Policy provides cover for direct losses caused by the actual destruction, disappearance or wrongful abstraction of Money or Securities outside the Premises while being conveyed by the Insured, Insured's Employee, an armoured vehicle company or any other person authorised by the Insured to have custody of the Money or Securities.

Depositors Forgery Coverage

Under the Depositors Forgery Coverage Section, the Commercial Crime Insurance Company is liable for direct losses caused by forgery or alteration of any cheque, draft or a similar bill of exchange to pay a certain sum of money by the Insured including:

  1. any cheque or draft made or drawn in the name of the Insured payable to a fictitious payee
  2. any cheque or draft procured from the Insured or the Insured's employee by anyone impersonating another and made or drawn payable to the one impersonated; and
  3. any cheque or draft made or drawn by the Insured payable to bearer as well as to a named payee without authority of the payee.

Counterfeit Currency

Another important Commercial Crime Insurance Policy Coverage relates to Counterfeit Currency. The Policy pays for loss sustained by the Insured resulting from the receipt of Counterfeit Currency by the Insured in good faith and in the ordinary course of business.

Electronic Fraud

A Commercial Crime Insurance Policy provides coverage for direct loss sustained by the Insured caused by Theft of Money or Securities held by an Insured, committed by the Third Party's unauthorised access to the Computer System of the Insured.

What are the Add-On Covers under a Commercial Crime Insurance Policy?

Commercial Crime Insurance Policy Coverage can be extended with the help of the following add-on covers:

  1. Legal Fees: The Insurance Company pays for the reasonable legal fees incurred by the Insured to defend a claim or a lawsuit resulting from a Loss covered under the Insurance Policy under the Legal Fees Extension.
  2. Care, Custody and Control: The Care, Custody and Control Endorsement under a Commercial Crime Insurance Policy pays for the direct loss resulting from Theft of Money or Securities or Property belonging to a Third Party which is in the Care, Custody and Control of the Insured.
  3. Public Relation Expenses: Public Relations Add-On Cover pays for expenses to avail services of a PR firm to protect reputation of the Insured which may be jeopardised following a Crime incident.
  4. Investigative Specialist Cost: The Investigative Specialist Extension pays for the costs to hire an Investigative Specialist to investigate a covered loss incident.
  5. Extended Discovery Period: The Extended Discovery Period extension grants an extended discovery period of 90 days to the Policyholder after the expiry of the Insurance Policy to report the Claim to the Insurance Company.  It is necessary that the covered incident took place within the Policy Period.

What is The Cost of a Commercial Crime Insurance Policy?

The following factors influence the cost of a Commercial Crime Insurance Policy in India:

  1. Industry and Business Type: Different industries and businesses have varying levels of risk exposure when it comes to commercial crime. Some industries, such as financial institutions or jewelry stores, are more prone to theft or fraud, resulting in higher insurance premiums. Insurance Companies assess the industry and type of business you operate to determine the risk level and determine the premium accordingly.
  2. Claims Experience: The claim experience of the Insured is an important factor which determines the cost of a Commercial Crime Insurance Policy. Higher the claims paid under the expiring Policy, higher will be the renewal premiums.
  3. Coverage Limits and Policy Terms: The Coverage Limits that you choose for your Commercial Crime Insurance Policy directly impact the Cost of Commercial Crime Insurance Policy. Higher Coverage Limits result in higher Insurance Premiums.
  4. Security Measures: Insurance Companies carefully evaluate the security measures in place to protect against theft and fraud. This includes physical security measures like Surveillance Systems, Alarm Systems, and Access Controls, as well as Cybersecurity measures to safeguard against Computer Fraud and Data Breaches. Businesses with robust security measures benefit from lower Insurance Premiums for their Commercial Crime Insurance Policy.

What is not Covered Under Commercial Crime Insurance Policy?

The following losses are not covered under a Commercial Crime Insurance Policy:

Exclusions under a Commercial Crime Insurance Policy
Losses occurring prior to Policy Inception are not covered
Loss resulting from any act, theft or omission of an Insured director or partner in any fiduciary capacity of the Insured are not covered
Consequential Losses are not covered
Losses resulting from Extortion, Kidnap or Ransom are not covered

Is Social Engineering Fraud Covered under a Commercial Crime Insurance Policy?

Social Engineering Fraud, also known as Impersonation Fraud, refers to a fraud where Criminals impersonate someone and contact the target victim, either through phone or email to transfer funds or change the bank account details of the vendor. If the funds are transferred, it results into financial losses for the victim. Such Social Engineering Losses are covered under a Commercial Crime Insurance Policy.

Example of Commercial Crime Insurance Policy Claim

Here's a claim example to help you understand how a Commercial Crime Insurance  Policy works

Case Study: XYZ Corporation

XYZ Corporation is a medium-sized manufacturing company based in Mumbai. The company has purchased raw materials from its supplier, ABC Ltd. at a cost of Rs2 Crores. ABC Ltd's IT Systems were hacked and an Invoice was sent from the supplier's Email ID for the Order Value and new Bank Details.
XYZ transferred the requested amount without verifying the bank details. The Claim was covered under the Commercial Crime Insurance Policy of XYZ

Is Social Engineering Fraud Covered under a Commercial Crime Insurance Policy?
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Qian Insurance Broking LLP is a leading Insurance Broker in India with expertise in risk management and commercial insurance solutions.

We can assure you of best Commercial Crime Insurance Policy Coverages and Quotes from multiple insurers along with assistance for complete assistance in Claims Process as well.

If you wish to buy Qian’s Commercial Crime Insurance policy online, you can either contact us at support@qian.co.in or give us a call at +91-22- 35134695.

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FAQS

What does a Commercial Liability Insurance Cover?

A CGL insurance policy covers the following:

  • Bodily Injury and Property Damage
  • Personal Injury and Advertising Injury
  • Medical Payments

Testimonials

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Hemik of Qian is knowledgable, prompt and very professional - highly recommended. I had to claim for a critical illness under my health insurance policy and Qian’s assistance with the claims process and advice on how to deal with the insurer was invaluable.

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