What Insurance Covers Theft by Customers?

If a customer takes merchandise or business property without paying, commercial property and crime coverage are the policies to examine. The California Department of Insurance explains that property insurance covers property stolen by a covered peril and describes crime insurance as protection for business assets, including merchandise and money. Depending on what is purchased, crime coverage may address larceny, burglary, or robbery. The label “theft” alone does not establish that every incident is insured.

A customer secretly removing inventory, using force to take cash, and a dishonest employee stealing merchandise are different circumstances. A crime policy may assign them to different insuring agreements, while a property form may have location, security, or unattended-property conditions. Employee dishonesty coverage should not be treated as customer-theft coverage, and a general liability policy generally addresses liability to others rather than replacing the business’s own stolen stock.

Check the cause-of-loss form and whether theft, shoplifting, burglary, and robbery are included; compare deductibles and inventory sublimits; and confirm how the policy values stock and requires proof of the loss. Ask about goods held on consignment or owned by others, and follow prompt notice and police-report conditions in the actual policy.