“Does business insurance cover theft?” It’s a very good question. Business insurance often includes one or more types of policies. So depending on the type of coverage you have, theft may or may not be covered by your business insurance.
Don’t worry. We’ll cover all of that, but we’re going to do things a little differently in this article.
Before most of the world is done with its first cup of coffee, a contractor arrives at a jobsite, eager to knock out everything on his punch list. That’s when he notices the door to the storage shed is wide open. That’s not right. He was sure it was locked last night. A closer look confirms what he feared: The lock is shattered and all the tools and equipment are gone.
Across town, an accountant is greeted by police officers when she arrives at a professional building. There’s been a break-in. Can she help determine if anything has been stolen from her office? Yes, laptops, a printer, and an espresso machine.
As they start to process what has happened, two different people in two different professions both have the same thought:
Does business insurance cover theft?
Since this is a fictional story, we can create two different endings. In the first, the answer is “No, insurance won’t cover the theft.” In the second, we have a happier ending, and insurance may cover the loss. Here’s how each version turns out.
Both our contractor and accountant have general liability (GL) coverage. And they’re wondering “Does general liability cover theft?” As insurance policies go, GL coverage can be a real workhorse. It can financially cover claims and losses from third-party accidents, property damage, and bodily injury.
To break that down a bit more, general liability insurance usually covers:
However, general liability insurance usually does not cover theft of your equipment, tools, and other business property.
This is likely bad news for our business owners who have only GL coverage. But a story like this doesn’t have to end that way.
Along with GL coverage, both of our savvy business owners purchased additional insurance policies that cover tool and equipment theft. Our contractor was covered by Inland Marine Insurance. This type of policy can financially protect your business from a number of unpleasant situations, such as:
After discovering the shed break-in, the contractor contacted the police and filed a report. He also shared that report with his inland marine insurer when he filed a claim (there can often be a requirement to do this within 30 days).
Inland marine insurance can make a lot of sense if, like the contractor in the story, you have movable property (such as your tools and equipment), or you store it at different locations.
Inland marine insurance also can cover theft or damage done to someone else’s property (such as a portable cement mixer that you rented for a job).
Whether it’s property you own or not, an inland marine policy may cover repairs and replacements, up to the policy’s limit.
As for our accountant, she added a business personal property (BPP) policy to her general liability insurance. A BPP policy is similar to inland marine coverage. The key difference is that business personal property insurance typically protects equipment and contents inside your workspace, such as our accountant’s office.
Thanks to the BPP coverage, our accountant will likely be covered for the costs to replace the laptops, printer, and that oh-so-important espresso machine (up to the policy’s limits).
As they often say at the end of a story, “All characters are fictitious. Any similarity to actual persons, living or dead, is purely coincidental.” Still, events such as tool and equipment theft can and do happen. So it can be a good idea to be prepared.
Whether you need to get inland marine insurance coverage for your business or a business personal property policy, we can make the plot fairly simple. We’re small business insurance experts. Need a general liability quote, inland marine quote, or business personal property quote? We can get one for you in minutes.
We also work with many of the nation’s leading insurers. That enables us to shop for multiple policies and prices, so you’re not stuck with a one-size-one-price-fits-all solution.
Buying insurance that may cover theft for a business can come with a lot of questions. We’re ready for them. Our licensed insurance pros are here with answers Monday-Friday, 8 a.m.-8 p.m., ET. With one call to 844-654-7272, they can often get you the information you need and get your policies in place all on the same call.
If your business vehicle is stolen, you’re not covered under a general liability policy. As we mentioned above, a GL policy typically covers the costs derived from third-party accidents, property damage, and bodily injury. It generally does not cover automobile-related claims
However, consider this scenario. Let’s say our contractor was using a ladder to install some siding. He steps away for a moment and a gust of wind topples the ladder, which lands right on the building inspector’s SUV.
While this does involve damage to a motor vehicle, it may be covered under the contractor’s general liability policy because it’s likely considered “third-party property damage.” And that could be a relief for our contractor, who really doesn’t want to be on the building inspector's bad side.
Unfortunately not. This is typically covered under an automobile insurance policy with comprehensive coverage.
Once again, the answer here is “no.” Neither general liability nor inland marine cover theft by an employee. However, it does open up another chapter in our story. Let’s go back to the break-in of the contractor’s storage shed.
After some diligent detective work, the police charge a former employee with the theft. Having worked at the site for several weeks, the ex-employee knew exactly what was in the shed, and when no one would be onsite.
In this case, since the thief is a former employee, the contractor’s inland marine insurance would likely cover the cost to replace the tools and equipment. Here’s more good news. Even if we changed the story a bit and the theft was committed by a random person, the coverage would still apply.
The story here is much the same as it is in the section above. Neither general liability nor professional liability insurance will cover construction site tool theft. The same is true if the storage shed caught fire and ruined all the tools and equipment.
Of course, there could be an unexpected plot twist here.
The skies darken as a thunderstorm moves into the area. And our contractor’s luck takes a dark turn as well. Lightning strikes a wooden structure at the edge of the worksite and starts a fire. While the fire department is able to put the fire out, the flames and smoke cause damage to a neighboring garage.
This would typically be considered “third-party property damage,” and repairing the damaged garage could be covered by the contractor’s general liability insurance.
In fiction, as well as in life, it’s not always clear how things might work out in the end. And probably no one knows that better than a small business owner. That’s why it can be a good idea to consider insurance coverage for a variety of business plot lines.
As an insurance company, we’re well-versed in how to protect your business in the event of an accident or other unforeseen event. At Simply Business, we go a step further. We look for ways to help you avoid or minimize the chances of bad things happening. Just check out our online small business resource center, Simply U.
That’s where you’ll find all kinds of helpful articles, tools, and tips to keep your business up and running. Here are just a few:
As a 9-year-old at summer camp, I hated it — especially after being pulled screaming from the pool during the swimming competition. While this left me without an aquatic achievement patch, it also inspired the letter to my parents that got me an early release from Camp Willard. That showed me the power of writing. I’ve done my best to use it only for good ever since, such as writing helpful articles for small business owners.
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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.