Crime insurance for businesses

Crime insurance can cover financial losses your business suffers as a result of crime, for example when an employee or an outsider steals or embezzles. Some policies also cover fraud where someone tricks you into paying an invoice to the wrong account. The focus is on the financial loss caused by the crime. The cost of investigating and restoring IT systems after a breach usually belongs to cyber insurance. In Swedish it is called förmögenhetsbrottsförsäkring.

How crime insurance works

1. You discover the loss. Often only when a supplier gets in touch about an unpaid invoice, or when the year-end accounts don't add up.
2. You report it to the police and to the insurer. A police report is usually a condition for compensation. Contact your bank straight away too, because a payment can sometimes be stopped in the first few hours.
3. The insurer investigates. It goes through what happened, what procedures were in place and the size of the loss.
4. The claim is assessed. If the loss is covered, compensation is subject to the policy limits and deductible.

What it covers

Social engineering fraud

Someone poses as a supplier, a customer or a manager and gets an employee to transfer money. This is often called social engineering. Two common forms are fake notices of new account details and emails that look as if they come from the CEO asking for an urgent payment. Not every policy includes this cover, so check the terms.

Crime by employees

Embezzlement, theft and breach of trust, when someone inside the company uses their access to take money or goods.

Crime by outsiders

Theft of money or valuable documents, and losses when someone gets into the company's bank or payment systems and moves money.

Example: The new bank details. A finance manager receives an email from a supplier the company has used for years. The logo and wording look convincing, and the email says the supplier has changed its bankgiro number, a Swedish payment reference used for invoices. The number is updated, and the next three invoices are paid there. A month later the supplier calls about unpaid invoices. The email came from an address that only resembled the real one, and the money is gone. Crime insurance may cover the loss if social engineering is included and the company has followed the policy's security requirements.

What is not usually covered

• Losses from crimes by owners with a large stake in the company.
• Indirect losses, such as profit the company missed out on, or interest.
• Losses where the procedures the policy requires were not followed, for example that changed account details must be confirmed some other way than by replying to the email.
• Losses you knew about before the policy started.
• The cost of restoring IT systems after a breach. That belongs to cyber insurance.

Exactly what applies is set out in the policy terms and in your försäkringsbrev (the policy document).

How crime insurance differs from cyber insurance

The two policies overlap, and it is easy to believe the company has one kind of cover when it only has the other. Put simply, cyber insurance pays for what happens in and around your IT systems: help during an attack, recovery, business interruption and claims from others. Crime insurance may cover money lost through criminal activity. Some cyber policies include limited fraud cover, with a lower amount. If the company has both, it is worth checking the terms to see which of them handles a fake invoice.

Who might need crime insurance?

Every company that pays invoices can be tricked. The risk grows when many payments go out, when one person can both set up and approve a payment, and when the finances are handled remotely or by an outside firm. It also applies to accounting firms that pay invoices on behalf of their clients. It can also make sense for companies that handle customers' money or hold stock that is attractive to thieves.

Some combined business insurance policies include basic crime cover; in others it is an add-on. The guide on what business insurance includes explains more.

How much does it cost?

The premium mainly depends on:

• headcount and turnover,
• how money is handled, for example whether two people must approve a payment,
• which industry the company is in,
• the insured amount and the deductible.

For more on pricing, see how much business insurance costs.

Frequently asked questions

Is crime cover included in business insurance?

It varies. Some packages have basic cover with a lower insured amount, others offer it as an add-on. Look in your policy document for förmögenhetsbrott or for breach of trust by employees (trolöshet hos anställd).

Doesn't cyber insurance cover the same thing?

Partly. Cyber insurance deals with the attack and the IT systems, while crime insurance may cover losses caused by crime. Email fraud can fall under either, or under both with different amounts.

Do I have to report it to the police?

As a rule, yes. Insurers almost always require a police report before they pay for a loss caused by a crime.