As soon as you begin your dream endeavor, it’s guaranteed that you’ll feel certain you made the right choice! Even during quite uncertain times, the friends and family who will support you, the idea that was winning from the beginning, and your on-point customer service are guaranteed to take you to amazing heights. Business crime insurance can protect you from the increasingly severe losses that occur after business-related crime rears its head. Your protection will cover assets, cash, merchandise, or other property loss.

How Does Business Crime Insurance Work?

Business crime insurance is available because most commercial property or business policies do not cover crime-related losses. It is possible to purchase business crime insurance as part of an industrial package policy. This is a unique combination that protects the business from crime, property loss, liability, and other scenarios. A business is also able to purchase business crime insurance as a standalone policy, and then combine it with another insurance policy already purchased. 

When this type of coverage is purchased as a standalone policy, you can specify what types of crimes you will be protected from. This is very valuable when you know you are susceptible to a specific form of intrusion. Embezzlement via electronic payment, merchandise being outright stolen, and forged checks are a few of the scenarios this accounts for. As things become more difficult nationwide and the squeeze is on once again due to inflation, this type of coverage will be sensible for businesses of all sizes here in Missouri.

What are the Impacts of Business Crime?

The various threats of business crime pose a threatening liability for companies of all sizes. Most companies worldwide lose an estimate of about 5% of their hard-earned revenue to fraud annually, and the problem is becoming even more widespread. Small businesses are the most vulnerable to this type of hit, partly because they have less staff to procure auditing and extra safety procedures. There is also a level of trust that these owners instill in their employees, because they know them on a personal basis, and interact with them every day.

In 2022, the companies with the fewest employees underwent the most staggering average losses. These averaged around $150,000 each, and ultimately inflict so much damage on smaller companies since they do not have as much capital or resources as those higher up the chain. As artificial intelligence and other high-tech innovations are growing every day, there are more unfortunate opportunities for small business owners to suffer losses. A business crime insurance policy will provide various limits of coverage for losses that differ greatly for those that happen on the property versus those that take place offsite.

What is not Covered by Business Crime Insurance?

Each policy comes with different terms and exclusions, and talking with us here at the Alexander Agency of St Charles will steer you in the right direction regarding the details. Here are some of the items that are generally NOT covered by your crime policy.

• Legal expenses against thieving employees
• Investigative expenses to prove the crime’s extent and execution.
• Losses your organization incurs after you already knew an employee has taken from you previously.
• Intellectual property, writing, client lists, and important company documents. 
• Losses that are based on inventory records, minus hard evidence. 
• Salaries or commissions already paid out to employees who were stealing.
• Indirect losses such as income from work, or projects that can’t be started without valuable terminals and other equipment. 

What are Some Tips for Preventing Business Theft?

Knowing your employees is a very essential practice when it comes to preventing business theft. Performing background checks on potential hires allows for a “true indicator” of one’s past and present. Even though checking references is key to having a snapshot of personal behavior and credibility, a background check can provide criminal records as well as a credit history.

Close supervision is one of the best ways to prevent various types of business crime. Employees know that they can potentially get away with more when it comes to illicit activity if prying eyes aren’t watching. When it comes to the all-important financials of the business, they can sometimes pay to have more than one person meticulously looking out regarding your flow of money.

Purchase order protocol allows for the payment, receipt, and preparation of purchase orders to exist as entirely separate functions, and to be handled by individuals with different titles. Using purchase orders is a good way to verify what is incoming, and not allowing people lower on the chain to handle things that could provide them an opportunity to steal.

The surprise informal audit has been proven over time to be one of the best ways to keep deceptive employees on their toes. This is the kind of activity that comes unannounced. It can thoroughly uncover wrongdoings as well as prevent more bad occurrences in the future. It is still good practice to use an outside firm for the yearly audit that is expected by all employees.

Heightening computer security measures is one of the biggest tools that you can leverage to prevent business crimes against you. It’s a good idea to restrict access to all computer terminals and vital records and make sure that you stay on top of periodically changing entry codes. Computerized functions are the origin point for so many different instances of business crime, and this is one area that you must be very diligent when acting upon.

Tracking business checks thoroughly is one of the ways to ensure that nothing goes immediately beyond your constant scrutiny as a business owner. It’s best to always use pre numbered checks, with exact amounts and payees clearly written in permanent ink. QuickBooks is a good form of financial software that allows you to produce all checks instantly, always being of help in the battle against business crime. If you keep a signature machine and blank checks on the premises, it is always a good idea to make sure they are locked up.

An eye on accounts receivable is another practice that will be a wise use of time in the age of skyrocketing business crimes. Mail opening and posting should always be separate functions, and official recording of checks and cash should only be for deposit, no matter what the circumstances.

As it is impossible to not notice the world of business getting more frightening every day, your Peace of Mind is just a simple call or click away! After all the hard work you have cultivated developing your ideas and routine, you don’t want to leave your organization vulnerable to various threats. Reach out to the Alexander Insurance Agency of St Charles now, and begin the journey with us as your trusted partner for your future safety.