Does business insurance cover theft?

Learn if theft, robbery or burglary can be covered, and how to choose a small business policy to protect you.

Harry Lew
By Harry Lew
Published Oct 16, 2023
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Commercial property insurance can help cover theft and replacement for stolen property so your business can quickly return to normal operations after a crime.

Business property — office equipment, tools and the like — can be a thief magnet. In 2022, US retailers lost $100 billion in merchandise, reports the US Chamber of Commerce. And 30% of US businesses fail because of employee theft, generating $50 billion in annual losses. The more business assets you have, the more likely criminals will target them.

Jump ahead to learn:

What kind of theft does business insurance cover?

The range of potential business theft is staggering. It can mean:

  • Criminals who break in to steal computer gear, inventory or tools.
  • Company laptops can be grabbed from traveling staff.
  • Products can be shoplifted from store shelves.
  • Criminals can commit cybercrimes like payroll scams and phony wire transfers.

These crimes can wreak havoc on small businesses who lack the financial reserves to bounce back. And business theft can put a firm’s future survival at risk.

Three types of business insurance can cushion the financial blow of tangible and intangible business theft:

  1. Commercial property insurance, which activates if someone steals a firm’s business property. However, it does not apply to employee theft or crimes targeting cash, accounts receivable, investments or other financial assets.
  2. Commercial crime insurance, which helps business owners deal with the aftermath of employee theft and financial fraud.
  3. Cyber insurance, to help protect your digital business assets from wire fraud, cyber attacks, ransomware or the losses of a data breach.

Together, these policies could help your business recover more quickly.

Does business insurance cover property damage and vandalism that result from theft?

If property damage occurs from a burglary attempt, your commercial property insurance may help pay to repair damages or replace property.

Vandalism is a related type of property damage. Examples of vandalism include:

  • Graffiti tagging
  • Smashing windows
  • Destroying inventory
  • Puncturing propane tanks
  • Wrecking computer systems
  • Damaging office furniture or rugs

Vandalism can be frustrating for business owners, not to mention expensive to fix. Commercial property insurance could help pay to repair or replace damaged property so victimized businesses can return to the status quo quickly. And if repairs require your business to shut down, your policy may provide business income to keep you whole during repairs.

What type of business insurance protects against theft?

Commercial property insurance could shield your tangible business assets. This includes the inside of your leased space, your inventory and tools and equipment. The business personal property part of commercial property policies applies to:

  • Tools and equipment
  • Inventory for bricks-and-mortar and online selling
  • Store fixtures and office furnishings
  • Computers, hard drives and networking gear
  • Outdoor features of leased space such as signage and fencing

Commercial property insurance usually does not cover incidents involving employee theft or financial fraud, such as wire transfers and payroll schemes. Commercial crime insurance may cover such losses.

Commercial crime insurance kicks in when commercial property insurance leaves off. It can help companies recover after employee theft of business assets or cash, forgery, embezzlement or other financial scams.

And cyber insurance could help your small business recover if your digital assets fail or fall victim to attack. It can help to shield electronic communication and financial transactions from interlopers, hackers and cyber attacks.

What should I do if my business gets robbed?

Take these actions after a burglary (break-in theft) or robbery (theft with threat of personal violence) at your business:

  • Notify the authorities as quickly as possible. You want them on the scene immediately so they can examine evidence and interview witnesses (if any).
  • Write down everything you can remember about the incident. Physical descriptions of perpetrators are essential, as well as a chronology of the crime.
  • If customers or other witnesses were present, ask them to remain on the scene until the police arrive. This is important because they may have more details about the incident.
  • Don’t worry about restoring order to your facility. Leave everything as is so the police can look for potential evidence. Don’t let anyone — staff or customers — tamper with the scene.
  • Don’t discuss the crime with anyone other than law enforcement. Avoid media interviews, social media posts or announcing the monetary value of your losses. Being loose-lipped about the incident might encourage copy-cat criminals.
  • File a claim with your insurance company as soon as the police leave. If you’re insured with NEXT, contact us as soon as possible to avoid delays or complications.

How NEXT can help keep your small business safe

NEXT helps small business owners buy affordable and convenient business insurance. We’ll ask a few questions and point you toward personalized commercial property insurancebusiness income insurance and business owner’s policies (BOP) to help keep your business safe.

Get a free instant quote, buy online in 10 minutes or less and receive your certificate of insurance immediately.

Start your free instant quote with NEXT.

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Harry Lew
About the author
Harry J. Lew is a writer and editor with a passion for simplifying insurance for small business owners. He has over 30 years of experience writing for numerous insurance companies, publishers and professional associations. He was a content manager for Gallagher, a global insurance broker. Harry's writing has also appeared in Insurance Forums, Producer's Web, Financial Planning, Consumer's Digest and National Underwriter.
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