Legal Definitions - crime insurance

Crime insurance is a type of insurance policy designed to protect businesses and sometimes individuals from financial losses resulting from various criminal acts. These policies typically cover losses due to theft, robbery, burglary, fraud, forgery, embezzlement, and employee dishonesty.

Here are some examples illustrating how crime insurance applies:

• Example 1: Retail Business Burglary

  A small electronics store experiences a break-in overnight. Thieves smash the front window and steal a significant amount of high-value merchandise, including laptops, smartphones, and gaming consoles. The store's standard property insurance might cover some structural damage, but its crime insurance policy would specifically cover the financial loss from the stolen inventory, enabling the owner to replace the goods and resume normal operations without suffering a catastrophic financial blow.

• Example 2: Employee Embezzlement at a Financial Firm

  A mid-sized investment firm discovers that one of its long-term administrative assistants has been systematically diverting small amounts of client funds into a personal account over several years through fraudulent transactions. The firm's crime insurance policy, particularly the component covering employee dishonesty or fidelity, would compensate the firm for the total amount of money embezzled by the employee, protecting both the firm and its clients from the financial impact of the internal fraud.

• Example 3: Forgery Against a Non-Profit Organization

  A local charity receives a large donation check, which is then stolen from their mailroom before it can be deposited. An unknown individual forges the signature and cashes the check. The charity's crime insurance policy, which often includes coverage for forgery and alteration of financial instruments, would protect the organization from the financial loss incurred by the fraudulent cashing of the donation check, ensuring the funds intended for their programs are not permanently lost.