Crime or Fidelity Insurance belongs to the so-called “named perils” covers and, depending on the industry segment and cover component, has been also known under some alternative names: “Fidelity insurance”, “Banker’s Blanket Bond” for banks or “FI-Crime” for the particularly exposed financial sector and reimburses the Policyholder for financial losses primarily by its own employees (so-called “trusted persons”) intentionally through unauthorised actions.
These include in particular embezzlement, theft, fraud, forgery of documents, computer fraud and other embezzlement. All employees, including temporary and interns, managing directors, board members, temporary employees and persons employed in employee-like positions in the insured company (e.g. security, maintenance and cleaning personnel) are regarded as trusted third parties.
In the course of time, extensions of fidelity insurance were also offered, which extended the circle of perpetrators to third parties. Although this has been available for a long time, particularly in the context of its “Computer Crime Insurance” (ECC) component, it was also offered in some markets as part of the “All Risk” approach.
New technologies, but also inventiveness driven by criminal energy, have brought new insurance cases to crime-insurance in recent years; in particular the so-called “Fake President” cases, in which the (mostly external) perpetrators tricked and deceived employees into making transfers to external bank accounts by claiming that they belonged to the management of the company. The spread of online banking and e-commerce has also contributed to a significant increase in fraud cases reported to insurers on a case-by-case basis.
Crime insurance can play an extremely important role, depending on the segment, business nature and structure of the company / group and be a must-have supplement to the company’s insurance portfolio by a thought-through combination with other FL products and an appropriate deductible.