Most property policies focus on accidents and weather, but businesses also lose money to dishonest people—employees who steal, forgers, robbers, and online fraudsters. Commercial crime insurance fills that gap. This guide explains the main crime coverages a business can buy, the precise legal definitions of robbery, burglary, and theft that exams love to test, and how "inside" and "outside" coverage for money and securities works.

Why crime coverage is separate

Standard commercial property policies often exclude or limit losses caused by dishonesty, employee theft, and certain criminal acts. Commercial crime insurance is purchased separately (or added to a package) to cover these exposures. Crime policies can be written on a loss-sustained form (covers losses that occur and are discovered during the policy period or a short window after) or a loss-discovered (discovery) form (covers losses discovered during the policy period, even if they happened earlier). Knowing the difference helps you answer "when is a loss covered?" questions.

The major crime coverages

A commercial crime policy is built from several insuring agreements, each targeting a different threat. A business selects the ones it needs.

Employee theft / employee dishonesty

Employee theft coverage protects the business against loss of money, securities, or other property caused by the dishonest acts of its own employees. This is the most important and most commonly purchased crime coverage because internal theft is a leading cause of business loss. It typically covers acts committed by employees alone or in collusion with others, and pays the employer (the named insured)—not the employee or any third party.

Forgery or alteration

Forgery or alteration coverage pays for loss resulting from someone forging or altering checks, drafts, promissory notes, or similar written instruments drawn on the insured's accounts. Example: a thief forges the business owner's signature on company checks. This protects the business's outgoing financial instruments.

Money and securities (inside and outside)

This coverage protects money (cash, coins, currency) and securities (negotiable and non-negotiable instruments like checks and stock certificates) against theft, disappearance, and destruction. It is split by location:

• Inside the premises – Covers money and securities while on the insured's premises or in the care of a financial institution, and also covers damage to the premises or a locked safe/vault during a covered crime.
• Outside the premises – Covers money and securities while being conveyed outside the premises by a messenger or armored car service (for example, an employee carrying the day's deposit to the bank).

Exam tip: "Inside" = on the premises or in a safe; "Outside" = in transit with a messenger. The dividing line is location.

Computer fraud and funds-transfer fraud

Modern crime coverage addresses electronic theft:

• Computer fraud – Covers loss of money, securities, or property resulting from the use of a computer to fraudulently transfer property from the insured's premises or bank to someone else.
• Funds-transfer fraud – Covers loss from a fraudulent instruction to a financial institution to transfer or pay funds from the insured's account (for example, a hacker impersonating the insured and directing a wire transfer).

These coverages respond to today's cyber-enabled theft, though pure "social engineering" scams may need a specific add-on.

Robbery vs. burglary vs. theft: know the definitions

Exam writers consistently test the precise meaning of these three crimes because they sound similar but are legally distinct. Memorize the distinctions.

• Theft is the catch-all: it simply means the unlawful taking of property and includes both robbery and burglary.
• Robbery requires a victim/person—property is taken from someone by force or threat. (Think: you are robbed.)
• Burglary requires forcible entry into a building with visible marks of the break-in. No person needs to be present, but there must be physical evidence of forced entry.

Exam tip: If a person is threatened, it's robbery. If a building is broken into with visible damage, it's burglary. If the term is broad and could be either, it's theft.

How limits, deductibles, and conditions work

• Crime coverages carry their own limits of insurance and a deductible per occurrence.
• A key condition excludes loss caused by the named insured, partners, or owners (you can't insure your own dishonesty), and acts by employees are excluded under the property sections but covered under the employee theft agreement.
• Discovery of dishonesty by an employee usually cancels coverage for that employee going forward.
• Crime policies generally cover loss only at locations and during periods specified, so the form (loss-sustained vs. discovery) matters for timing.

Key terms at a glance

• Employee theft – Dishonest acts by the insured's own workers.
• Forgery or alteration – Fraudulent signing/changing of the insured's checks and instruments.
• Money – Cash and currency; securities – negotiable/non-negotiable instruments.
• Inside vs. outside – On premises/safe vs. in transit by messenger.
• Computer fraud – Theft via fraudulent use of a computer.
• Funds-transfer fraud – Loss from a fraudulent instruction to transfer funds.
• Robbery / burglary / theft – Force on a person / forced entry into premises / any unlawful taking.

Common exam traps

• Theft is the broadest term; robbery and burglary are specific kinds of theft. Don't treat them as equals.
• Robbery requires a person to be threatened or have property taken by force; burglary requires forcible entry with visible signs.
• Inside vs. outside is about location: premises/safe vs. in transit with a messenger.
• Employee theft covers the employer's loss, not third parties, and excludes acts by owners/partners.
• Computer fraud vs. funds-transfer fraud: the first is theft using a computer; the second is a fraudulent instruction to transfer money.
• Loss-sustained vs. discovery forms determine when a loss is covered—watch the timing in scenario questions.

Quick recap

• Commercial crime insurance covers losses from dishonest and criminal acts that property policies exclude.
• Employee theft/dishonesty is the most important coverage—it protects the business from its own workers' theft.
• Forgery or alteration covers fraudulent checks and instruments drawn on the insured.
• Money and securities coverage splits into inside (premises/safe) and outside (in transit by messenger).
• Computer fraud and funds-transfer fraud address electronic and wire-transfer theft.
• Theft is the broad term; robbery = force/threat against a person; burglary = forcible entry with visible signs.