Insuring Money and Securities

Thief breaking into a cash register
Image courtesy of [Peter Dazely] / Getty Images.

A thief breaks into your business and steals cash from a safe. Will the loss be covered by your commercial property policy? Unless your policy includes money and securities coverage, the answer is no. This article will explain the purpose of the coverage and how it can be added to your property policy.

Excluded Property

The following items are listed as excluded property under most commercial property policies:

Accounts, bills, currency, food stamps or other evidences of debt, money, notes or securities

Except for accounts, these items may be insured as money and securities. Losses resulting from damage to accounts receivable records can be insured under a separate coverage called accounts receivable insurance.

Money and securities coverage can be provided by adding the ISO Crime Coverage Form (or an insurer's version of this form) to your property policy. Money and securities insurance is one of several coverages that can be purchased under the crime form. 

What are Money and Securities?

What do the terms money and securities mean within the context of crime and property insurance? The word money typically means currency, coins and bank notes that are in current use and that have a face value. Money also includes travelers checks, register checks and money orders held for sale to the public. 

The term securities is often defined as negotiable and nonnegotiable instruments or contracts representing either money or property.

An instrument is negotiable if it guarantees a specified amount of money that will be paid to the party named in the instrument. An example of a negotiable instrument is a certificate of deposit.

The definition of securities also includes tokens, tickets, revenue and other stamps in current use, and evidences of debt issued in connection with credit or charge cards, if the cards were not issued by you.

Money and Securities Coverage

There are two separate coverages that apply to money and securities: Inside the Premises and Outside the Premises.

Inside the Premises

This coverage applies to loss of money and securities that occurs inside your premises or inside a banking institution. To be covered, a loss must result directly from theft committed by someone who is inside your premises or inside a bank. Alternatively, the loss must result directly from disappearance or destruction.

Here are examples of losses that would likely to covered under Inside the Premises.

  • A thief breaks into your business office, pries open a safe, and steals $5,000 in cash.
  • A customer of your retail store steals unsold money orders from a cash drawer.
  • A fire breaks out in a bank and destroys a safe deposit box you rent that contains $2,000.

Inside the Premises coverage also applies to loss of or damage to a locked safe, vault, cash register, cash box or cash drawer located inside the premises. The damage must result directly from an actual or attempted theft of or unlawful entry into those items. In the first example cited above, both the damage to the safe and the loss of the cash would be covered.

Outside the Premises

Outside the Premises coverage applies to money and securities that are lost outside your premises. To be covered, the loss must occur while the items are in the custody of a messenger or an armored motor vehicle company. In addition, the loss must result directly from theft, disappearance or destruction. Messenger means you, a relative of yours, or any of your partners or members, or any employee that has care and custody of property outside the premises. 

Besides money and securities, Outside the Premises coverage applies to loss of or damage to other property outside the premises in the care and custody of a messenger or an armored vehicle company resulting directly from an actual or attempted robbery. Other property means property other than money or securities, but does not include computer programs or electronic data.

Here are examples of losses that would likely be covered under Outside the Premises:

  • An employee of yours is on his way to your bank to deposit $5,000 in cash to your company's account when he is mugged. The mugger steals the cash.
  • Two armored car drivers are entering their truck when they are order out of the vehicle by three armed robbers. The robbers drive off with the truck, which contains $10,000 of your money.
  • A partner of yours has just left your office when he is robbed of a company laptop. While the loss of the laptop should be covered, the loss of programs and data on the laptop will not be covered.

Exclusions

Neither of the coverages outlined below applies to losses resulting from theft by you, your company principles, or your employees. Thefts committed by employees can be insured under Employee Theft Coverage. Also excluded are losses resulting from voluntary parting with property, money operated devices, or any exchange or purchase. Additional exclusions apply.

Included in Some Policies

Money and securities coverage is automatically included in property policies offered by some insurers. It is also included in some package policies, including the standard ISO businessowners policy. The limits are usually low but can be increased.