AT A GLANCE
How the cover works
Crime insurance protects the organisation’s own money or property against defined dishonest or fraudulent acts. It differs from liability insurance because the principal loss is suffered directly by the insured organisation.
Underwriters examine payment authority, segregation of duties, bank verification, reconciliations, employee screening, system access, stock controls and how changes to supplier or customer details are authenticated.
COVER
What may be covered
- Employee dishonesty involving theft, fraudulent payments or misuse of property.
- Forgery, alteration, computer fraud and funds-transfer fraud within the policy definitions.
- Social-engineering loss where a suitable extension and verification requirements apply.
- Theft or fraud committed by specified third parties where included.
- Investigation, verification or recovery expenses within stated sublimits.
Cover varies by insurer and applies only as stated in the schedule and policy wording.
BOUNDARIES
Common exclusions and limitations
- Known dishonesty, prior incidents or losses discovered before the policy period.
- Loss caused by directors or owners where they fall outside the insured-employee definition.
- Trading losses, credit risk, pricing errors and inventory shortages without evidence of an insured act.
- Cyber interruption, data restoration and third-party privacy liability requiring Cyber Insurance.
- Failure to follow mandatory payment-verification or dual-authorisation conditions.
This is not a complete list. The quotation, schedule and full wording determine the actual cover.
CLAIMS IN PRACTICE
How a claim might arise
01. A trusted employee creates false suppliers and diverts payments over an extended period.
02. Accounts staff receive a convincing email impersonating a director and transfer funds to a criminal account.
03. A fraudster changes genuine supplier bank details and intercepts a large payment.
These scenarios are illustrative only and do not confirm that a particular claim would be covered.
CHOOSING COVER
Questions worth resolving
- Map who can create suppliers, change bank details, approve payments and release funds.
- Use independent call-back verification and dual authorisation for payment changes.
- Understand discovery periods, single-loss definitions and aggregation of repeated acts.
- Select social-engineering sublimits that reflect normal and exceptional transaction values.
- Coordinate the wording with Cyber, Fidelity Guarantee and financial-institution arrangements.
CONNECTED RISKS
Related protection to consider
- Cyber Insurance for incident response, system recovery and privacy or network-security liability.
- Trade Credit Insurance for customer insolvency and prolonged default.
- Management Liability for allegations concerning oversight, controls and governance.
- Stock and Property insurance for physical theft where crime wording is not the primary response.
QUESTIONS
Frequently asked questions
Is Crime Insurance the same as Cyber Insurance?
No. Crime focuses on direct financial loss from defined dishonest acts; Cyber focuses on technology incidents, recovery and related liabilities, though some overlap exists.
Does it cover phishing and invoice fraud?
Only where the wording includes the relevant social-engineering or funds-transfer cover and required controls were followed.
Are owners and directors treated as employees?
Not always. The definitions and any ownership exclusions require careful review.
When is a loss discovered?
The policy defines discovery, often when an authorised person first becomes aware of facts suggesting a covered loss. Prompt notification is essential.
Australian insurance context
For Australian organisations, Crime Insurance Guide should be considered against the actual activities, location, scale, contracts, assets and risk controls of the business. Insurance requirements and insurer appetite can vary by state or territory and by the way the risk is presented.
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