BROCHURE: UNDERSTANDING THE ISO COMMERCIAL CRIME COVERAGE FORM

(January 2026)

Billions of dollars in corporate profits are stolen each year, with many daily thefts from warehouses to offices rarely gaining public attention. Despite new crime prevention technologies, employee screenings, and strict procedures, employees can still cheat their employers and steal their hard-earned profits.

Most thefts result in small losses that either fall below deductibles, are excluded, or go uninsured. However, significant thefts can threaten a company's survival as swiftly as an uninsured fire.

Business personal property coverage forms and policies written on a Special Causes of Loss typically include protection against theft of property and merchandise by outside parties. However, they do not cover losses caused by employee dishonesty, theft of money and securities, computer fraud, safe burglary, extortion, or other related criminal activities. This underscores the importance of every business having a comprehensive crime coverage program.

Disclaimer: The information provided in this brochure does not represent the exact contract terms of the policy. Consult the actual policy for exact definitions, conditions, coverages, exclusions, and limitations. Coverage may vary based on the company's underwriting guidelines and practices.

NOTE: The changes from the 06 22 edition are included in this brochure, but are not highlighted in bold.

BASIC INSURING AGREEMENTS

The Insurance Services Office (ISO) Commercial Crime Coverage Form has eight basic Insuring Agreements. You can choose any one or more of them.

FIDELITY 

Encompasses three coverage parts:  

·         Employee Theft

Covers loss or damage to money, securities, and other property that one or more of your employees causes.

·         ERISA Plan Official Dishonesty

Covers loss or damage to money, securities, and other property by a plan official, or the insured if a sole proprietor.

·         Employee Theft Of Clients' Property

Covers loss or damage to money, securities, and other property of a customer from theft or forgery by an identified employee.

FORGERY OR ALTERATION

Encompasses two coverage parts:

·         Forgery of Negotiable Instruments

Covers loss caused when someone other than an employee forges or alters a negotiable instrument, such as a check.

·         Forgery of Payment Card Instruments

Covers losses from forged written instruments in connection with credit or debit or credit cards issued to the insured, employees, or ERISA Plan Officials for business purposes.

INSIDE THE PREMISES–THEFT OF MONEY AND SECURITIES

Covers theft, disappearance, or destruction of money and securities from inside your premises or inside a financial institution's premises. It does not cover theft of merchandise or stock.

INSIDE THE PREMISES–ROBBERY OR SAFE BURGLARY OF OTHER PROPERTY

Covers loss or damage to property other than money and securities inside your premises. However, it applies only if you or an employee is robbed or if the safe is burglarized.

OUTSIDE THE PREMISES

Covers the loss of money or securities while they are outside your premises and in the care of a messenger or armored car service, due to theft, disappearance, or destruction. It also covers loss or damage to other property, excluding money and securities, but only if it occurs as a direct result of a robbery outside the premises while the property is in the care of a messenger or armored car service.

COMPUTER AND FUNDS TRANSFER FRAUD

Covers loss or damage to money, securities, and other property due to fraudulent activity within a computer system. This includes unauthorized entries or changes made by an individual without your knowledge, such as debit or deletion at a financial institution beyond your control.

It also covers losses from fraudulent instruction to a financial institution to transfer, pay, or deliver funds from your transfer account.

FRAUDULENT IMPERSONATION

Covers loss when a customer’s account or wire transfer information is changed by the insured at the request of an individual who appears to be authorized but is an imposter, and the insured, acting in good faith, makes the change and money or securities are sent to a fraudulent account.

It also covers loss caused by the insured acting in good faith and sending money or securities to a person, entity, or account based on fraudulent instructions.

MONEY ORDERS AND COUNTERFEIT MONEY

Covers losses directly resulting from you or your employees accepting fraudulent money orders or counterfeit money in good faith in exchange for merchandise, money, or services.

OPTIONAL INSURING AGREEMENTS

Any of the following insuring agreements can be chosen instead of or alongside the more common options listed above. While some are tailored to specific types of business, most are available to all commercial entities.

CONDITIONS

Several key conditions warrant review, with Employee Theft coverage particularly critical given its abrupt termination. This aspect makes it especially important to understand.

Coverage for any employee under the Employee Theft Insuring Agreement ends immediately upon a designated person, HR personnel, or an equivalent individual who is not colluding with the employee learning that the employee committed theft or any dishonest act, whether it occurred before or after employment. If the employee remains employed, any loss caused by them will be denied.

ENDORSEMENTS

Several endorsements are available to modify, restrict, or broaden coverage provided by the insuring agreements.

NOTE TO SUBSCRIBERS:

Related Article: Commercial Crime Coverage Forms Checklist provides a listing of endorsements to consider.

REPRINT PERMISSION

PF&M subscribers in any manual or electronic form are permitted to reprint any portion of this brochure for their commercial insurance customers. Other uses require permission from The Rough Notes Company, Inc.