Insuring Money and Securities

Robber holding a gun and demanding money from a store employee
Image courtesy of [stevecoleimages] / Getty Images.

A robber storms into your retail store, empties the cash register at gunpoint, and then flees.  An employee of yours is walking to the bank to deposit $5,000 in cash into your company's account when he is mugged. The mugger steals the cash. Are losses like these covered by a commercial property policy? The answer is no unless the policy includes money and securities coverage.

Why Money Isn't Covered

Loss or damage to money isn't covered under a typical property policy because money doesn't qualify as covered property.

Money and related property usually appear in a list of items called Property Not Covered. This list normally includes the following:

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

With the exception of accounts, all of the items cited above may be insured for an additional premium under money and securities coverage. Losses resulting from damage to accounts receivable records can be insured under a coverage called accounts receivable insurance.

Money and Securities Coverage

Money and securities coverage is normally provided by the addition of an ISO Crime Coverage Form (or an insurer's proprietary crime form) to your property policy. ISO provides two options, a loss sustained form and a discovery form. The loss sustained form covers losses that occur during the policy period. The discovery form covers losses that are discovered during the policy period.

If you aren't sure which form is right for you, ask your agent or broker for assistance.

Both crime forms include a variety of coverage options. You can choose money and securities coverage by itself or in combination with other coverages such as Computer Fraud and Employee Theft.

What are Money and Securities?

The words money and securities are defined terms in the ISO crime forms.

The word money 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 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. For instance, a stock certificate is a negotiable instrument. An example of a non-negotiable instrument is a U.S. savings bond.

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.

Theft Versus Robbery

The coverages afforded for money and securities under the ISO crime forms make reference to theft and robbery. Both are defined terms. Theft means the unlawful taking of property to the deprivation of the insured. Robbery means the unlawful taking of property from the care and custody of a person by someone who has caused (or threatened to cause) that person bodily harm, or who has committed an act that is clearly unlawful.

 

Note that theft has a much broader meaning than robbery. Theft includes robbery, but only certain types of thefts qualify as robbery.

Money and Securities Coverage

A crime form includes 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 sudden gust of wind blows $3,000 in cash off your desk and out an open window.
  • 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 containers. 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 result directly from theft, disappearance or destruction. In addition, the loss must occur while the items are in the custody of a messenger or an armored motor vehicle company. Messenger means you, a relative of yours, or any of your partners or members. The term also includes any employee that has care and custody of property outside the premises. 

Besides money and securities, Outside the Premises coverage applies to other property that is lost or damaged while outside the premises. The property must be in the care and custody of a messenger or an armored vehicle company. The loss must result 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:

  • You are returning to your car from the post office when you are robbed of $1,000 in postage stamps.
  • Two armored car drivers are entering their truck when they are ordered 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.

Bitcoin and Other Virtual Currencies

Until recently, the ISO crime forms were silent on the subject of virtual currencies like Bitcoin. ISO's definition of money neither included nor excluded such currencies. ISO revised its crime forms in 2015, and the new forms specifically exclude virtual currencies. The definition of money now excludes any digital currency, crypto currency or any other type of electronic currency. Currencies like Bitcoin can be covered via a separate endorsement. However, this endorsement does not apply to money and securities coverage.

Included in Some Property Policies

Money and securities coverage is included automatically in property policies offered by some insurers. It is also included in some package policies, such as the standard ISO businessowners policy. The limit is often low, but your insurer may be willing to increase it for an additional premium.