Does business insurance cover theft?

Commercial property insurance can help with theft coverage and financial losses to replace stolen property so your business can quickly return to normal business operations after a crime.

Business property—office equipment, tools, inventory and the like—can be a thief magnet. Forbes advisor reports that 90% of small business retailers nationwide have experienced theft at their stores.

And it's not only retailers; businesses in all industries are affected, NEXT reports. Approximately 30% of U.S. businesses fail because of employee theft, generating $50 billion in annual losses. The more business assets you have, the more likely criminals will target them.

What Kind of Theft Does Business Insurance Cover?

The range of potential business theft is staggering. It can mean:

• Criminals who break in to steal computer gear, inventory, or tools.
• Company laptops lifted from traveling staff.
• Products can be shoplifted from store shelves.
• Criminals can commit cybercrimes like payroll scams, computer fraud, and phony wire transfers.

These crimes can wreak havoc on small businesses that lack the financial reserves to bounce back. And business theft can put a firm's future survival at risk. It's best to review current policies to understand the specific types of theft they cover.

Does Business Insurance Cover Property Damage and Vandalism That Result From Theft?

If property damage occurs from a burglary attempt, your commercial property insurance may help pay to repair damages or replace property.

Vandalism is a related type of property damage. Examples of vandalism include:

• Graffiti tagging
• Smashing windows
• Destroying inventory
• Puncturing propane tanks
• Wrecking computer systems
• Damaging office furniture or rugs

Vandalism can be frustrating for business owners, not to mention expensive to fix. Commercial property insurance could help pay to repair or replace damaged property so victimized businesses can return to the status quo quickly. And if repairs require your business to shut down, this type of coverage may provide business income insurance to keep you whole during repairs.

What Type of Business Insurance Protects Against Theft?

Three types of business insurance policies can cushion the financial blow of tangible and intangible business theft:

1. Commercial property insurance. Activates if someone steals a firm's business property. However, it does not apply to employee theft or crimes targeting cash, accounts receivable, investments or other financial assets.
2. Commercial crime insurance. Helps business owners deal with the aftermath of employee theft and financial fraud.
3. Cyber insurance. This can help protect your digital business assets from wire fraud, cyber attacks, ransomware or the losses from a data breach.

Together, these types of insurance coverage could help your business recover more quickly.

Commercial property coverage could shield your tangible business assets. This includes the inside of your leased space, your inventory and tools and equipment. The business personal property part of commercial property policies applies to:

• Tools and equipment.
• Inventory for bricks-and-mortar and online selling.
• Store fixtures and office furnishings.
• Computers, hard drives, and networking gear.
• Outdoor features of leased space, such as signage and fencing.

Commercial property insurance usually does not cover incidents involving employee theft or financial fraud, such as wire transfers and payroll schemes. Commercial crime insurance may cover such losses.

Commercial crime insurance kicks in when commercial property insurance leaves off. It can help companies recover after employee theft of business assets or cash, forgery, embezzlement, or other financial scams.

And cyber insurance could help your small business recover if your digital assets fail or fall victim to attack. It can help to shield electronic communication and financial transactions from interlopers, hackers and cyber attacks.

6 Things to Do Immediately if Your Business Gets Robbed

Take these actions after a burglary (break-in theft) or robbery (theft with threat of personal violence) at your business:

1. Notify the authorities as quickly as possible. You want them on the scene immediately so they can examine evidence and interview witnesses (if any). Your insurance company may request a police report for your claim.
2. Write down everything you can remember about the incident. Physical descriptions of perpetrators are essential, as well as a chronology of the crime.
3. If customers or other witnesses were present, ask them to remain on the scene until the police arrive. This is important because they may have more details about the incident.
4. Don't worry about restoring order to your facility. Leave everything as is so the police can look for potential evidence. Don't let anyone—staff or customers—tamper with the scene.
5. Don't discuss the crime with anyone other than law enforcement. Avoid media interviews, social media posts, or announcements of the monetary value of your losses. Being loose-lipped about the incident might encourage copycat criminals.
6. File a claim with your insurance company as soon as the police leave.