Dominic Hutt

Crime Insurance vs Fidelity Insurance – the key differences explained

With technological advances and ever-increasing cost of living pressures, financial crime is a fast growing area of concern for business owners of all sizes.

Press articles across many industry sectors regularly report where employees, and even company directors, have abused their position of responsibility in handling client and/or own company monies.

Furthermore, the external financial crime threat that companies face is becoming more sophisticated and harder to detect.

Fidelity Insurance has typically been available as an extension to Office Combined or Management Protection policies at a modest premium for levels of cover around £25,000 to £50,000. The protection afforded under such a policy extension would relate to company own funds being misappropriated as a result of employee dishonesty.

Crime Insurance provides an enhanced level of cover for policyholders and can be purchased as part of a Management Protection policy or on a stand-alone basis. Levels of cover available usually start at the £250,000 mark and the minimum premium point would be around £350 depending on the policyholder’s risk criteria such as turnover, industry sector and risk management controls in place.

In addition to the loss of company own funds covered under a Fidelity policy, Crime Insurance also serves to protect third party funds held in trust by a company. The sums of money held in a Designated Statutory Trust Client Account are often much higher than a company’s own Office Account and therefore a far more attractive target to fraudsters.

A vital component of a Crime Insurance policy, particularly in light of our increasing reliance on technology referred to earlier, is cover provided for sums of money being unwittingly transferred to a fraudulent third party purporting to be a client or supplier, for example. This head of cover is referred to as Social Engineering or Funds Transfer Fraud and is often sub-limited within a policy so worth double checking the contract wording. i.e. a Crime policy with a Limit of Indemnity of £250,000 may only have a £100,000 Limit of Indemnity for claims arising from Social Engineering.

For more insurance & risk management tips for your business, please contact Dominic Hutt on 07786 494847 or