CRIME INSURANCE

Qualified Retirement Plans are required by ERISA to provide Employee Dishonesty insurance for the administrators of the Plan and for anyone else who handles the assets of the Plan.  The current requirement is that such insurance be for at least 10% of the asset value of the Plan (subject to a maximum of $500,000 of coverage).  ERISA Fidelity insurance is available for this purpose. 

The theft of your assets by one or more of your employees can span a long period of time and can result in significant loss to you.  You may wish to consider internal controls such as frequent physical inventories, countersignature of checks, a Review or Audited Financial Statement, etc. to reduce the likelihood of such an occurrence.  Employee Dishonesty insurance is available to cover such losses.

Employee Dishonesty insurance covers a business for the loss of its assets as a result of the dishonesty of the business’s employees’ dishonest acts.  If your assets are exposed to loss by the dishonest acts of non-employees (e.g., the employees of outside contractors), this can be covered by adding to your Employee Dishonesty insurance a provision entitled “Designated Agents as Employees” (form #CR2502).

Employee Dishonesty insurance covers a business for the loss of its assets as a result of the dishonesty of the business’s employees’ dishonest acts.  If your assets are exposed to loss by the dishonest acts of volunteers, this can be covered by adding to your Employee Dishonesty insurance a provision entitled “Volunteer Workers as Employees” (form #CR2509). 

Even ordinary Employee Dishonesty insurance does not cover losses to the personal account(s) of a business executive.  If your personal accounts are exposed to loss by the dishonest acts of your employees, this can be covered by a provision entitled “Personal Accounts of Specified Persons” (form #CR2522). 

Employee Dishonesty insurance typically will not cover expenses you incur to prove the extent of your claim.  If you believe that those expenses might be substantial, they can be insured by adding to your Employee Dishonesty insurance a provision entitled “Expenses Incurred to Establish the Amount of Loss” (form #CR2540).

Employee Dishonesty insurance typically will not cover the theft by employees of assets resting outside the building in which your business is located.  If you have outdoor assets that could be stolen by an employee, this exposure can be insured by adding to your Employee Dishonesty insurance a provision extending the definition of “Premises” to include parts enclosed by a fence or wall under form #CR3523 and/or to include an entire plot of land under form #CR3526.

Even ordinary Employee Dishonesty insurance does not cover losses resulting from the unauthorized reproduction of your firm’s computer software by an employee.  It is possible to insure against this by adding to your Employee Dishonesty insurance a provision entitled “Unauthorized Reproduction of Computer Software by Employee’s” (form #CR0414). 

If your computer programs and data are exposed to intentional damage by your employees, they can be protected by adding a form entitled “Destruction of Electronic Data/Programs” (form #CR0413).