Factors That Determine the Cost of Commercial Theft Insurance

Commercial crime insurance protects your business from financial losses stemming from business-related crime. For example, the insurance can help you if thieves break into your store or if your employees embezzle your funds. Below are some of the common factors insurance companies use to determine premiums for commercial theft insurance.

Type of Business

The type of the business determines how vulnerable it is to theft. Industries that deal with small but expensive items are often more vulnerable to theft losses than others. For example, a luxury watch retailer is likely to face higher theft losses than a grocery retailer. A high risk of expensive losses usually leads to high premiums.

Property Value

Criminals won't just target your merchandise (for those who deal in physical goods) — they can also target other business properties. For examples, thieves can steal:

• Your office decorations, such as wall paintings
• Your electronics, such as computers and printers
• Your office furnishings

Thus, the value of movable properties on your premises also matter. The risk of losing valuable properties often leads to high premiums.

Location of Business

Crime risks vary by location, as crime statistics show. Both the nature and rate of crime in your area of operations will determine your premiums. For example, you likely face a high risk of theft if you deal with tangible items in a location with high property theft. The insurance companies will set their premiums to match your location's risks.

Size of Business

Commercial crime insurance covers losses due to employee dishonesty. For example, the coverage can come to your rescue if one of your employees steals from your cash register.



The more employees you have, the higher the risk that one of them might steal from you. A large number of employees are also more difficult to monitor. Thus, small businesses with few employees enjoy more favorable premiums than large businesses with many employees.

Security Measures

The insurance company will also consider the checks and balances you have in place to prevent theft. Tight security measures are likely to lead to lower premiums. Examples of security measures include:

• Surveillance cameras
• Security alarms
• Automated bookkeeping
• Restricted access controls
• Regular auditing

Such measures not only deter theft but can also help you recover stolen goods and avoid filing insurance claims.

Revenue

Insurance companies have determined a link between annual revenue and theft-related losses. If you don't make as much, you aren't likely to lose as much in theft.



Don't forget that commercial crime insurance covers theft of both tangible and intangible assets. For example, a company that generates millions of dollars per year stands to lose a lot if one of its employees decides to embezzle funds. Thus, high revenue often leads to high premiums.

Crime History

Insurance companies often use statistics of the past to predict the future. Your history of theft or theft-related claims will affect your premiums. Say thieves have broken into your office twice in the last couple of years. Such a history might mean:

• Your location has a high number of criminals
• You haven't secured your office properly
• Thieves find your office attractive

Whatever it is, your premiums will likely be higher than premiums of a similar office with no history of theft.

Coverage Limit

Lastly, coverage limit will also play a part, just as it does for other lines of insurance. A high limit means you expect the insurance company to cover most or all of our losses after a theft. Thus, high coverage limit usually translates to high premiums.



Illinois Insurance Center is a leading insurance agency in Chicago, IL. We have extensive experience in the insurance industry of over 40 years. Contact us for a no-obligation quote, and enjoy our professional services.