Crime INSURANCE

Protection from employee theft, forgery and fraud.

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2 MIN

Crime insurance basics with Myles

What Crime does & doesn't cover

Recommendations based on stage and vertical

Which add-ons make sense for your startup

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BECAUSE

The average fraud case costs a company $1,509,000.

WHEN

Launching your first product
Growing headcount
Increasing revenue
Acquiring high-value property acquisition

WHY

Organizations with fewer than 100 employees see the largest share of fraud cases – 28 percent.

See recommended limits based on your stage and vertical

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THE PROTECTION

What Crime Insurance Covers

Employee Theft

Covers your company for direct theft of money and securities committed by an employee, whether or not they’ve been identified or are acting in collusion with other persons.
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Computer Fraud

Protects your company for loss resulting directly from a fraudulent data entry (altered electronic data or computer programs in your company computer system) that directly causes: money or securities to be transferred or your account at a financial institution to be debited or deleted.
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Computer Fraud is intended to focus on direct access to your computer system (AKA, computer-to-computer) as the root cause of the fraudulent transfer.

Counterfeit Currency

Protects your company for loss resulting directly from a fraudulent instruction directing a financial institution to debit your transfer account, and to transfer money or securities from that account.
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This most commonly includes scenarios where a third-party fraudster sends fraudulent instructions to your financial institution, purporting that the instructions came from you, but where the instructions were transmitted without your knowledge or consent.

Forgery or Alteration

Covers your company for loss resulting directly from forgery or alteration of checks, drafts, promissory notes, or similar written orders to pay a sum of money that is drawn by you.

Software Contractor Coverage

Available in most states, this coverage extends Employee Theft to include software contractors as employees.

ADD ON

What it doesn’t cover

Costs resulting from a data breach or related to data. Refer to your Cyber insurance policy if you experience this type of loss.
Loss of digital assets and cryptocurrency (inquire about Web3 Protection Policy if you have this exposure and are interested in coverage).
Computer Fraud does not cover loss associated with entry of electronic data or computer program into a computer system not owned or operated by your company directly (i.e., an external computer or third-party computer system).
Amounts below the specified deductible amount or exceeding the specified limit of insurance.
Loss resulting from theft or any other dishonest act committed by the company, or any partners or members of the company. Member means an owner of a limited liability company represented by its membership interest who, if a natural person, may also serve as a manager.
Forgery means the signing of the name of another person or organization with intent to deceive; it does not mean a signature which consists in whole or in part of one's own name signed with or without authority, in any capacity, for any purpose.
Loss associated with any failure of any electronic systems (e.g., applications, software programs, hardware, networks, etc.)
Theft, disclosure or loss of important data, personal information or trade secrets.
Loss associated with contractors (contractors are not included in the definition of Employee).
Any occurrence taking place outside of the policy period or any loss first discovered outside of the policy period.
Indirect Loss, such as loss associated with an inability to realize income that you would have realized had there been no loss of or damage to money or securities.
Note: The terms "money", "securities", "theft", "employee","forgery",“electronic data”,“computer program”,“computer system”,"fraudulent instruction","financial institution", and "transfer account" are defined in the policy document
Note: this is not an exhaustive list of what the policy does not cover. Please refer to your issued policy for specific policy language, including definitions, terms, conditions, limitations and exclusions. Please read your policy carefully. Please note terms in “quotes” above are defined in the policy.

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FROM THE ACTUARIES

Crime Claims Examples

Incident

The head of finance at a startup providing an online document management platform embezzles over $500,000 over a 5 year period by creating false vendor invoices, and substituting the check made payable to the vendor with checks made payable to himself. The startup’s bank eventually notices a discrepancy in the checks and the employee is caught. A claim is filed to recover the money lost.

Resolution

The crime policy pays the policy limits of $500,000 to the startup.

Incident

The Head of Accounting at an insurtech startup opens an email with an attached .zip file that contains a virus. The virus is able to obtain the username and password to the startup’s bank account. A wire is then initiated in the amount of $150,000 from the startup’s bank account to an unknown bank account. A claim is filed to recover the money lost due to the attack.

Resolution

The crime policy responds by paying the startup the $25,000 policy limits.

Financial losses due to embezzlement

Incident

Resolution

The crime policy pays the policy limits of $500,000 to the startup.

Costly email virus attack

Incident

Resolution

The crime policy responds by paying the startup the $25,000 policy limits.

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