Business owners policies (BOPs) are designed to protect businesses from financial loss and other accidents. This insurance is crucial for small businesses in low risk industries. Unfortunately, BOPs don’t cover everything and it is important to know the restrictions on your policy.
Property Theft Coverage
Besides general liability coverage, a basic business owners policy includes commercial property insurance, which covers:
· Fire
· Smoke
· Burst pipes
· Explosions
· Vandalism
· Theft
Under this type of coverage, theft refers to the stealing of physical property owned by the insured business. There are limits to this coverage. Property/contents coverage will not compensate for physical money, billion, securities, vehicles or signs not attached to the building.
Incidents that this coverage does not cover include:
· Employee Dishonesty
· Normal Wear and Tear
· Power Failure
· Computer Software/Hardware Failure
· Burglary/Robbery (theft by force)
As you can see, your property insurance under your BOP has limits when it comes to theft. Thankfully, you can add coverages to cover some of the gaps.
Employee Theft Coverage
Although you vet your employees carefully and would like to think that your team would never steal, things happen. Basic property insurance won’t provide compensation if an employee steals from the business. Crime coverage, also known as employee dishonesty coverage, provides compensation if an employee or group of employees steals from the business/commits fraud. It covers against theft of property, merchandise and cash as well as embezzlement and forgery.
You can add this coverage to your BOP to enhance your theft coverage.
Optional Coverages that Cover Theft
There are other coverages that include theft that may be added to your BOP or purchased as a separate policy.
· Commercial Auto Insurance: If your business frequently uses vehicles to transport products or equipment, it’s important to keep the work vehicles safe. Comprehensive coverage includes theft, even if the theft is committed by an employee.
· Cyber Insurance: Not everything that can be stolen is physical. Most companies store a great deal of information online, leaving themselves open to cyber-attacks. Cyber attacks occur when a hacker breaks through your company’s firewalls and damages, destroys or steals data. Cyber insurance provides compensation for stolen electronic data. It can also cover cyber extortion.
The best way to prepare for theft is prevention. Invest in safety practices and anti-theft systems for your business’ vehicles and locations and be sure all employees know what to do in case of an attempted robbery or other emergency. Speak with your insurance agent about tailoring your BOP specifically for your coverage needs.