Crime and Fidelity Insurance
Crime and Fidelity Insurance
Protection against employee theft, forgery, and other internal financial crime.
Crime and fidelity insurance reimburses a business for direct financial loss caused by theft, forgery, or fraud, most often committed by an employee rather than an outside party. It typically covers a range of trigger events including employee dishonesty, computer fraud, funds transfer fraud, and forged checks, and it is written to respond regardless of whether the loss was ever prosecuted criminally.
Why internal financial crime is a distinct exposure
Most property and liability policies are built around damage or injury caused by outside events, but they typically exclude losses caused by an employee's own dishonest acts. That gap matters because employee theft is often the largest single source of unrecovered loss for small and mid-sized businesses, particularly when one person controls both bookkeeping and payment approval with limited oversight.
Crime and fidelity coverage is written specifically to fill that gap, responding to a defined list of criminal acts rather than general liability exposures, and it typically applies whether the wrongdoer is a long-tenured employee, a temporary worker, or in some forms a contracted vendor with access to company funds.
What the policy typically responds to
Coverage forms commonly include employee theft of money, securities, or property, forgery or alteration of checks and other financial instruments, computer fraud involving the fraudulent transfer of funds through a company's own systems, funds transfer fraud initiated through wire or electronic payment channels, and impersonation schemes where a criminal poses as a vendor or executive to redirect a payment.
Some policies also address theft of client property that a business holds in trust, which matters for firms handling client funds, inventory consigned by others, or third-party assets in their care, custody, or control.
How limits and structure are typically set
Coverage is usually written on a per-loss basis, and businesses select limits based on the volume of funds handled, the number of employees with access to accounts, and the sophistication of internal controls such as dual authorization on payments and segregation of accounting duties.
A discovery period defines how long after the policy ends a business can still report a loss that occurred during the policy period, which matters because dishonest schemes are often uncovered well after they begin.
Fitting crime coverage into a broader program
Crime and fidelity insurance is typically purchased alongside a business owners policy or commercial package rather than as a substitute, since it addresses a narrow but important gap that property and liability forms do not cover.
Businesses that manage client funds, run payroll for others, or process significant electronic payments often see this coverage as a baseline expectation from lenders, boards, or clients rather than an optional add-on, and many financial institutions require proof of fidelity coverage before extending credit lines or custodial relationships.
What it typically responds to
- Employee dishonesty. Theft of money, securities, or property committed by an employee.
- Forgery and alteration. Losses from forged or altered checks and other financial instruments.
- Computer and funds transfer fraud. Fraudulent manipulation of company systems or electronic payment channels.
- Impersonation fraud. Losses from social engineering schemes that trick staff into redirecting funds.
- Third-party property in care. Theft of client funds or property a business holds in trust, subject to policy terms.
Common exclusions
- Business income loss. Lost revenue or reputational harm is typically not a covered crime loss.
- Inventory shortages. Ordinary shrinkage without proof of a specific dishonest act is typically excluded.
- Acts disclosed before the policy. Losses from schemes known to management before binding are typically not covered.
- Trading or investment losses. Market losses from investment decisions are a separate exposure, not crime coverage.
What drives price
- Number of employees with financial access
- More people touching accounts payable or payroll typically raises exposure.
- Internal control strength
- Dual authorization and reconciliation practices typically improve terms.
- Prior loss history
- A history of internal theft or fraud typically raises pricing.
- Limit and discovery period selected
- Higher limits and longer discovery periods typically increase premium.
- Volume of funds handled
- Businesses moving larger sums typically carry higher exposure and cost.
Provident does not publish premium figures. Pricing is set by each carrier and depends on the specific risk.
Questions we get asked
Ready to price crime & fidelity?
One application, shopped to the carriers that actually write this class. A licensed agent presents the options side by side.