Crime Insurance

What is Crime Insurance?

Crime Insurance is also known as employee dishonesty but also covers losses caused by, or to, a third party.

The policy is also designed to cover EFT Fraud (Corporate Account Takeover), which is when a bank receives a fraudulent funds transfer request from a third party under the guise of being your company.  A bank is not liable for these types of losses as business bank accounts do not have the same protection as individuals do afforded by Reg-E.

Doesn’t General Liability or an Umbrella policy cover these types of losses?

No.  Crime and employee dishonesty are not in the scope of a General Liability or an Umbrella policy.  In the payments industry, the rule of thumb is that General Liability covers generally nothing.


What types of companies need this type of insurance?

A company where it is possible for either an employee or third party to steal funds directly from the company, its company bank account, or its customers.


Claim Scenarios

A payment processor was nearly bankrupted by a $350K employee theft and had to ultimately be restructured by receiving a $17M injection from a private equity firm.

A bank receives a request from their client to wire out $100K.  The wire goes out as it looks like a legitimate request when in fact is a fraudulent wire request from a hacker.  The client sues the bank and the court rules in the bank’s favor as the liability falls with the client.